The income beneficiaries also contend that they are entitled to receive the income from the additional and/or changed stock until the death of the survivor of each trust and that then and only then should there be a distribution of the additional or changed stock together with the other parts of the corpus or trust to the Museum. The income beneficiaries do not contend that the aforesaid dividends be construed as ordinary income and thus be turned over to them as such. They, however, do contend, in addition to the foregoing, that in the event the court deems the stock, capitalized from earned surplus, as a <mask> under this trust, under no circumstances may that part of Standard Oil Company (Indiana) stock, capitalized from surplus capital (to wit, 43.03%), be deemed a stock divi*1008dend under the trust, but should in effect be considered a stock split, and as to that part of the stock it should be added to the corpus of the trust and they should receive the income therefrom accordingly.


“ To alter this conclusion the evidence must show more than that their judgment has proved to be erroneous or that the question was debatable. He who criticises their action must prove that it resulted from ignorance or mistake or error as to fact or law. The burden is upon him as to any items which he disputes. But [p. 178] investigation to this 'extent of the action of directors is always permissible. If in their balance sheet of a certain date they have included among the items of capital and surplus assets in truth previously destroyed, claims previously lost, in making *245our comparison we take account of that fact. Their delay in charging off such losses should not control us in apportioning the <mask>. But 'we say again this does not permit a review by us of the exercise by the directors of their discretion and judgment. If they believe, in view of the facts before them, that a loss will be escaped or if they charge off a part of such loss believing that the balance sheet represents the salvage value of any claims or demands which the corporation may possess, we will not review their action. No subsequent train of events showing that their judgment was mistaken or their hopes vain will alter this result.”


The court cannot act for the directors, but may only interpret their acts and determine whether they in fact made a distribution of earnings. In this case they made transfers of earnings to capital and increased the stated value of the company’s stock instead of declaring and paying a dividend by payment of cash or issuance of stock. These acts, fortuitous as they were, clearly gave no right of apportionment to the life tenants. The later stock split was made for legitimate corporation reasons, long after the transfers of 1937 and 1945, and was not intended as a <mask>. No stock dividend was declared at the time of the stock split and no transfers of earnings to capital were then made. The directors intended and made no distribution or division of the earned surplus previously transferred to capital. The new shares, as a whole, merely replaced the old shares as a whole. It was merely an exchange as the company stated. In 1948 the directors showed that they knew how to declare a stock dividend when they expressly did so, and they then stated that it was the first stock dividend in the company’s history.


Both parties refer to page 513 of Ballantine, Corporations: “ There is danger that the shares subject to an option may be altered or changed in value, and elaborate provisions are usually made for the protection of the conversion privilege to prevent dilution by amendments reducing par value or by stock split-ups or the issue of additional shares as stock dividends.” Protec*857tion of a conversion privilege to prevent dilution by reason of declaration of stock dividends was not provided in the stock option plan under review, and its provisions above quoted may not be presumed, as a matter of law, to encompass a <mask>. Nor is the fact that surplus is capitalized on the declaration of a stock dividend to be equated with 61 any change in the common stock capitalization ”. The motion is denied.


Between the date of the execution of the will and the date of the death of the testator and at a stockholders’ meeting of the State Bank of Ontario held on January 8, 1952, a resolution was adopted that the number of shares of stock be increased from 300 to 7,500, that the par value be decreased from $100 to $20 per share, that the authorized capital be increased from $30,000 to $150,000, and that the bank officers file the necessary certificate of amendment to the original certificate of incorporation. On January 10, 1952, the board of directors caused the sum of $200,000 to be transferred from undivided profits to the surplus account and $120,000 to be transferred from the surplus account to the capital account on the bank’s records. The certificate of amendment was duly filed, and on March 1, 1952, the testator exchanged his 35 shares of stock in the State Bank of Ontario, having a par value of $100 per share, for 175 shares of stock, having a par value of $20 per share. Thereafter, at a directors’ meeting held on or about March 6,1952, a resolution was adopted that a <mask> of 4 shares on each of the outstanding shares having a par value of $20 be declared. Pursuant to this resolution and on March 10, 1952 an additional certificate was issued by the bank to the testator for 700 shares of stock of a par value of $20 each.


The objectant herein is the special guardian for the infant child, one of the remaindermen. It is the contention of the special guardian that it was incumbent upon the trustee to add the <mask> to the corpus of the trust, pursuant to section 17-a of the Personal Property Law, in effect May 17, 1926. Is this contention valid? That is the question.


In 1947 Eastman Kodak Company split its common stock five shares for one. The additional shares were allocated to principal by the trustee; and no claim is made herein that any of such new shares constituted income. (See Matter of Strong, 198 Misc. 7, affd. 277 App. Div. 1157, arising under a testamentary trust established before the enactment of section 17-a of the Personal Property Law.) In each of the years 1948, 1949, 1952, 1954 and 1956 a <mask> of 5% was declared, and in the years 1950 and 1951 a stock dividend of 10% was declared. The trustee allocated such shares to principal. In 1959 Eastman Kodak Company made a 100% stock distribution.


After due deliberation I have reached the conclusion that my decision must be, and is, against the respondents on the issue thus raised. The right of said life beneficiary to receive during her life the income from the twenty shares of stock forming such trust, whether such income was distributed in cash or by <mask>, was a property right, and as such had become vested prior to the enactment of the statute above referred to. Said section 17-a provides: “ Unless otherwise provided in a will, deed or other instrument, which shall hereafter be executed and shall create or declare a trust, any dividend which shall be payable in the stock of the corporation or association declaring or authorizing such dividend and which shall be declared or authorized hereafter in respect of any stock of such corporation composing, in whole or in part, the principal of such trust, shall be principal and not income of such trust. * * * ” This section I feel should not, under the language employed, ■ be deemed as intended by the Legislature to be retroactive in its scope or effect, and is applicable only to trusts created subsequent to May 17, 1926. (Matter of Norton, 129 Misc. 875, 887.) For reasons stated in the decision in said Matter of Norton, I have reached the conclusion that the rule of law which controls the trust created by the will of Charles B. Lawton, and which should here be followed, is that announced in Matter of Osborne (209 N. Y. 450, 484, 485).


The will therefore evidences a clear intention that stock dividends were not to be subjected to the rule of the statute, or to an allocation based upon equitable principles, but that such *291dividends were to be controlled by the testamentary direction for the treatment of all stock dividends as income. (See Matter of Chapman, 208 Misc. 390.) The facts are distinguishable from Matter of Clark (29 Misc 2d 253) where the grantor of a trust specified that stock dividends be principal and not income. The entire proceeds of the <mask> must accordingly be treated as income.


In an argument carefully confined to an assumption without a concession that the special guardian and other respondents are correct in their interpretation of the will, the trustee urges that securities received by him in the form of dividends based on transfers by the issuing corporations to capital stock accounts from capital surplus, as distinguished from earned surplus, are allocable to the account of Mrs. De Bemer. In each instance the dividend was declared from a surplus which was available for distribution prior to the acquisition of the stock by the testatrix or the trustee but in no case did it represent “ earnings accumulated prior to (my) decease or prior to the purchase ”. It is permissible corporate practice in this and other States to distribute capital surplus in such a manner and the distribution may take the form of a <mask>. (Randall v. Bailey, 288 N. Y. 280; Matter of Lloyd, 292 N. Y. 280, supra; Matter of Whitacre, 208 Minn. 286.) However, dividends derived from such sources are uniformly held to constitute a return of capital and hence to be allocable to principal in *455accordance with well-settled rules of trust accounting (3 Page, Wills [3d ed.], pp. 457-458 ; 2 Scott, Trusts, § 236.14). No departure from this rule is permissible under the present will because the dividends clearly do not represent accumulated earnings (Matter of Lissberger, 189 Misc. 277, affd. 273 App. Div. 881, motion for leave to appeal denied 298 N. Y. 934; Matter of Strong, 198 Misc. 7, affd. 277 App. Div. 1157). As a consequence all securities received by the trustee as dividends declared from capital surplus as distinguished from earned surplus accounts are held to be additions to corpus and not income payable to Mrs. De Berner. Matter of Lloyd (292 N. Y. 280, supra) relied upon by the trustee is clearly not in point, for in that case the will directed the allocation of “ all dividends ” to income.


In all the cases cited by the counsel of the respective parties 'that it has been practicable to examine, there seems to be only -one case where there has been an attempted departure from the elementary rule as laid down in Perry on Trusts, supra, and as uniformly held in numerous cases. In Lowry v. Farmers’ Loan & Trust Co., 30 Misc. Rep. 334, is was held at Special Term that “ Stock dividends must be added to the corpus, and cannot be paid to the life beneficiary.” That decision was reversed by the Appellate Division, reported in 56 App. Div. 408, and *44the reversal was unanimously sustained by the Court of Appeals in 172 N. Y. 137-142. In that case it appeared that the Pullman Palace Oar Company “ by a capitalization of accumulated earnings made and retained in its hands, from time to time, increased its capital stock from $86,200,000 to $100,-000,000 and, predicated thereon, made a <mask> of ten per cent, to its stockholders,” and the distribution was made in the form of stock certificates instead of money. The court held “ that the stock certificates belonged to the life tenant, and not to the remaindermen.”


Petitioner Malcolm E. Wren requests the allocation to him of the entire 100 shares of General Foods Corporation common stock received by the trust as a 100% <mask> or 2 for 1 stock split in 1956.. In 1951 that corporation had transferred $50,000,000 from earned surplus to its capital stock account. In 1956, at the time of the declaration of the stock dividend, a further sum of $20,587,210 was similarly transferred from earned surplus to capital stock.


Decedent died on July 9,1934. In her will, which was executed on July 5, 1927, she directed: “ The Trustees of the trusts hereinabove created shall pay over to the respective beneficiaries of the income hereunder, the entire income from any bonds held as a part of any trust fund without amortizing any premium at which they may have been taken over or purchased, as well as any and all stock or special dividends.” In the absence of such direction section 17-a of the Personal Property Law would apply and any. <mask> would be considered wholly principal. Here the testatrix has provided otherwise and her testa*794mentary direction is controlling (Matter of Hilliard, 254 App. Div. 879, motion for leave to appeal denied 279 N. Y. 811; Matter of Heinrich, 195 Misc. 803) and, as to the distributions made by the corporations in their own shares, the issue is whether the additional stock thus issued constituted a stock dividend or a stock split-up. The distinctions between these two methods of issuing corporate shares has been stated in Matter of Lawrie (119 N. Y. S. 2d 906, 911) and has been followed in other decisions with which this court is in accord. (Cf. Matter of Berger [Bankers Trust Co.], 6 Misc 2d 468; Matter of Davis, 128 N. Y. S. 2d 152.)


In Trust Number Three there were 200 shares of a different corporation. In January, 1946, this corporation distributed the additional share for each two shares then held. The corporation in its resolution termed the additional shares a <mask>. It transferred from paid-in surplus to capital account $5 for each newly issued share. It could have declared a cash dividend out of the paid-in surplus. By reason of the corporation’s own declaration and its own treatment of the transaction this issue of shares is clearly a stock dividend which comes within the text already quoted from article ninth of the will. Accordingly such additional shares are deliverable to the income beneficiary as income.


This is an appeal from an order appointing a receiver. Eighth Judicial District Court, Clark County; Mark R. Denton, Judge. Appellant SureFunding, LLC, an investment firm, lost millions of dollars it invested into a foreign company that was later discovered to be a <mask>. Respondents are a subset of SureFunding's noteholders who are granted a senior secured priority interest with respect to their


In 2010, the BLP collapsed and Plaintiffs lost their investments. An FBI investigation revealed that Sigillito operated the BLP as a <mask>. Unsealing the indictment in May 2011, the United States charged Sigillito with money laundering, wire fraud, and mail fraud. The federal indictment asserted that, inter alia , Sigillito and Brown retained unauthorized placement fees after transferring their clients' assets. A jury found Sigillito guilty, and the federal district court sentenced him to forty years in prison. Sigillito's convictions and sentences were affirmed. United States v. Sigillito, 759 F.3d 913, 941 (8th Cir. 2014).


Williamson is significantly distinguishable from this action. In Williamson, the court determined that there was sufficient evidence to raise a triable issue that Strafaci was acting purely to benefit himself, insofar as he received unwarranted compensation from the inflated values of the fund’s portfolio, and that his valuation scheme did not benefit the fund, because it operated like a <mask> ('Williamson slip op at 16). Further, in response to questioning as to whether he intentionally overstated values for the purpose of obtaining increased personal compensation, Strafaci pleaded the Fifth Amendment defense (id.). On this basis, the court found that it could not determine as a matter of law that the adverse interest exception to imputation was inapplicable (id).


"1. You must represent and warrant (and provide full disclosure that) no monies moved illegally from one entity to another, they still do not understand how much money you pulled out of Boulevard or why that investment entirely failed (and full disclosure means turn over 100% of everything) and if this is a non-starter, it will confirm for them the <mask> they NOW believe exists here and has existed for perhaps as long as Bernie Madoff got away with it. But that was discovered and eventually they all are so the day of reckoning is really at hand and if you feel 100% innocent you should disclose and disclose fully (and should have months ago).


collateral per the Third Amendment to the Note Purchasing Agreement (TNPA). Respondents sued SureFunding, alleging a breach of the TNPA due to SureFunding improperly investing funds in the <mask>. Respondents thereafter moved for appointment of a receiver, alleging that SureFunding was not acting in the best interest of the creditors. The district court granted respondents motion and appointed a receiver of respondents' choice. Sure-Funding moved to vacate the receivership order, and the district court denied the motion. This appeal followed. Respondents lacked standing to bring their claim, SureFunding contends that respondents lack standing to bring their breach of contract claim, and therefore lack standing to pursue the appointment of a receiver. because the TNPA bars an action brought without the consent of all Key Purchasers, and one Key Purchaser has not joined the suit against SureFunding. Whether a party has standing is a question of law we review de novo. Arguello v. Sunset Station, Inc., 127 Nev. 365, 368, 252 P.3d 206, 208 (2011). And, we review a district court's interpretation of a contract de novo. May v. Anderson, 121 Nev. 668, 672, 119 P.3d 1254, 1257 (2005). A plaintiff has the burden of proving that it has standing to assert its claims. Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). "[S]tanding requires that a plaintiff have suffered an 'injury in face that is not merely conjectural or hypothetical." Miller v. Ignacio, 112 Nev. 930, 936 n.4, 921 P.2d 882, 885 n.4 (1996) (citing to Lujan, 504 U.S. at 560.); Anya Bernstein, The Hidden Costs of Terrorist Watch Lists, 61 Buff. L. Rev. 461, 510 (2013) (standing requires "an actual or imminent concrete harm."). However, this court will enforce a contract as written if the language of the contract is clear and unambiguous. Am. First Fed. Credit Union v. Soro, SUPREME COURT OF NEVADA


¶13 In April 2012, Twyman sent Fortitude an email detailing his past legal difficulties after Fortitude learned about what he characterized as “largely incomplete and erroneous” information about him available on the internet. His email explained he realized “some of [Fortitude’s] prospective investors” may also choose to undertake their due diligence, so he believed it prudent to “mitigate any possible misunderstanding by providing a totally candid and transparent rendering of the facts.” The email provided explanations and context for several past issues, including the SEC judgment arising out of Twyman’s involvement with BeneFund, a judgment against Twyman in the mid-1980s for a breach of fiduciary duty involving the embezzlement of $150,000, and a civil action against Wycliffe to recover some of the $850,000 Wycliffe received as proceeds of a <mask> after he invested over $2.3 million from clients, friends, and relatives.


Donnér’s situation would have been far more parlous had he not won the race to the District Attorney’s office. He has confessed to stealing $4.8 million from his former clients, in many instances inducing elderly people and close personal friends to deplete their hard-earned (and modest) life’s savings by misleading them about the nature of the "investment” they were making. He was also close to the seat of power at Oxford. He worked in the same room as the firm’s founder and criminal mastermind, Samuel Forson, and his closest associates, where he helped run the <mask> that Oxford allegedly became. If the three third-tier defendants were convicted of all the counts they face (and, at this moment, they are presumed innocent of every accusation), they would be guilty of but a fraction of Donner’s admitted misdeeds.


Defendant’s assertion that this case involves allegations of criminal conduct "of a particularly scandalous nature” is no more than hyperbole. There is nothing particularly scandalous about participation in a chain mail or <mask>, nor is the element of criminality a significant consideration. Clearly if criminal trials are subject to audio-visual coverage, a fortiori, so are civil trials which may involve some degree of criminal conduct. That defendant does not feel comfortable with press coverage of the trial is of no moment because, as the Uniform Rules for Trial Courts make clear, her consent is not required (22 NYCRR 131.4 [b]). This office must therefore agree with the finding of the trial court that the nature of the proceeding is not such that media coverage would interfere with the fair administration of justice or operate to the prejudice of any party (22 NYCRR 131.4; Matter of People v Chambers, NYLJ, Jan. 4, 1988, at 6, col 4).


Additional prior conduct is also relevant to our sanctions determination, including defendants' repeated attempts to arbitrate this matter, together with a tardy appeal to this court of one of the trial court's orders denying their motion to arbitrate, despite their failure to appeal the denial of their initial motion to arbitrate. ( J.B.B. Investment Partners II , supra , A145221.) In addition, the trial court granted plaintiffs' special motion to strike a cross-complaint filed by defendants, after finding that defendants' claims did not constitute protected speech and defendants were not *384likely to prevail on the merits because all of the claims in the cross-complaint were protected by the litigation privilege. ( Civ. Code, § 47, subd. (b)(2).) We affirmed the court's order on appeal. ( J.B.B. Investment Partners III , supra , A152143.) As we stated in our 2018 opinion affirming the grant of the anti-SLAPP motion, defendants "offered misleading quotes, taken out of context from the demand letter," to argue that plaintiffs' attorney was threatening criminal prosecution for Fair's alleged <mask> if Fair did not agree to pay plaintiffs $350,000, whereas he in fact "threatened no such thing." ( Ibid. ) Defendants raised a similar argument in their opposition to the motion for summary adjudication and in this appeal, which provides further evidence of frivolousness. (See Bucur v. Ahmad , supra , 244 Cal.App.4th at p. 192, 198 Cal.Rptr.3d 127.)


*229Appellant's deceptive practices were circumstantially corroborated by other evidence discovered at JFM on July 15, namely the five empty cremains boxes, the one almost-empty cremains box, and the unidentified box of cremains. The court of appeals' only mention of this physical evidence was a reference to "ashes" found by authorities on July 15. Johnson , 513 S.W.3d at 193. This evidence, in combination with Appellant's lies to his customers, suggested that he was engaged in a kind of <mask> in which he delivered earlier ashes for later bodies.


Applying these tests to the three counts of the indictment (which contain the requisite specificity), petitioner has not come forward with any law from the State of Alabama indicating that the acts are not criminal.* Count I, which alleges that Lewis diverted the proceeds of securities to his own use, clearly describes actions which suggest intent to perpetrate <mask>.


. The federal courts continue to maintain that the New York common-law fraud standard for claims arising from the sale of securities, including RMBS, includes the element of loss causation. (See Bank of Am,., N.A. v Bear Stearns Asset Mgt., — F Supp 2d —, —, 2013 WL 4734495, *5, 2013 US Dist LEXIS 125700, *14-15 [SD NY, Sept. 3, 2013, No. 08-Civ-9265 (AJN)].) It is important to note that “warranty fraud” cases, where a fraud claim is allowed to proceed with a breach of contract claim, is not the same as a garden variety <mask> claim. Fraud based on breach of a warranty, as in monoline cases (e.g. MBIA Ins. Corp. v Countrywide Home Loans, Inc., 39 Misc 3d 1220[A], 2013 NY Slip Op 50677[U] [Sup Ct, NY County 2013]), have separate legal considerations, such as insurance law, and are guided by unique principles *865that do not affect the normal loss causation standard. (See generally Merrill Lynch & Co. Inc. v Allegheny Energy, Inc., 500d 171, 183-184 [2d Cir 2007]; DDJ Mgt., LLC v Rhone Group L.L.C., 15 NY3d 147 [2010].) As this court has explained, it has long been the law that “the analysis of reliance in a tort action based on fraud or misrepresentation (tort reliance) differs from the analysis of reliance in actions for breach of express contractual warranties (warranty reliance).” (Project Gamma Acquisition Corp. v PPG Indus., Inc., 34 Misc 3d 771, 778 [Sup Ct, NY County 2011]; accord CBS Inc. v Ziff-Davis Publ. Co., 75 NY2d 496 [1990].)


Shortly before the Phase I trial, the trial court signed an order aligning Choudhri as the plaintiff and Latif and Mokaram (collectively the "Latif Parties") as the defendants for the Phase I trial. The Phase I trial lasted over two weeks. The trial court submitted questions to the jury concerning Choudhri's claim that Mokaram converted Choudhri's interest in the Lamborghini, and Mokaram's claim that Choudhri committed <mask> in the 2008 transaction, upon which Mokaram sought rescission of the 2008 transaction. The court also submitted the following question concerning the 2010 transaction:


“[a]lmost all <mask> complaints will allege that the defendants did what they did in order to benefit themselves in some way. If such an allegation were sufficient to invoke the protections of 4(a) [the personal profit exclusion], the broad coverage for ‘Securities Claims’ provided by the National Union Policy would be rendered valueless by this exclusion . . . and would swallow up the very securities coverage that the National Union policy purports to grant” (see also In re Donald Sheldon & Co., Inc., 186 BR 364). Similarly, accepting the Insurers’ construction that any profit or advantage gained by an insured is sufficient to trigger the exclusion essentially renders the coverage afforded by the policies illusory, as it would exclude most coverage for securities violations that the policies are intended to grant.


On April 20, 2015, plaintiffs filed a first amended complaint, alleging causes of action for <mask> in violation of the California Corporations Code, fraud, breach of fiduciary duty, constructive fraud, breach of contract, breach of the implied covenant of good faith and fair dealing, declaratory relief, promissory estoppel, rescission for fraud in the inducement, and legal malpractice. They also filed a motion for summary judgment. Also on April 20, defendants filed a second motion to stay the action and compel arbitration, based on the same arbitration provisions in the applicable operating agreements *375they relied on in the first motion to compel arbitration.


A black box warning is an FDA warning to alert consumers about serious or life-threatening side effects the drug may have. It is the most serious warning given by the FDA. The black box warning here stated that Xyosted “can cause blood pressure increases that can increase the risk for major adverse cardiovascular events (MACE), including non-fatal myocardial infarction, non-fatal stroke and cardiovascular death, with greater risk for MACE in patients with cardiovascular risk factors or established cardiovascular disease.” App. 171. Plaintiff’s first two complaints were similarly dismissed by the District Court for failure to adequality plead <mask>. Each time, Plaintiff was granted leave to file an amended complaint. These statements were made in (1) a press release dated December 21, 2016; and (2) a press release dated February 27, 2017. App. 159–61.


While the three Levines were still stockholders, while the plaintiff was still director and subsequent to the commencement of this action, the individual defendants procured the merger of Biddle Sawyer into another Delaware corporation; and, as the Levines held less than 10% of Biddle Sawyer stock, the defendants were enabled to and did divest the Levines of their shares in both the old and new corporations (Delaware Corporation Law, § 253) making the Levines creditors to be paid out at the appraised value of their former shares. (The Levines, as stockholders, have pending in the United States District Court for the Southern District of New York a <mask> action seeking among other relief their reinstatement as stockholders of Biddle Sawyer. An attack on that complaint has been successfully withstood.)


been paid in full by the Company more than 60 days previously. In April 2018, plaintiffs commenced an action in federal district court, where, in due course, plaintiffs’ <mask> claims were eventually dismissed on the merits, and plaintiffs’ remaining state law claims were dismissed without prejudice. See Iafrate v Angelo Iafrate, Inc, 827 F Appx 543, 547 (CA 6, 2020). In July 2019, plaintiffs filed their complaint underlying this appeal which primarily concerned defendants’ refusal to honor the expired Warrants. Plaintiffs raised four claims: (1) breach of contract, (2) reformation, (3) unjust enrichment, and (4) fraud.


“BY SIGNING THIS AGREEMENT YOU AND BEAR STEARNS AGREE, THAT CONTROVERSIES ARISING UNDER OR RELATING TO THIS AGREEMENT OR ANY ACTIVITY BETWEEN YOU AND BEAR STEARNS, . . . SHALL BE DETERMINED BY ARBITRATION. ANY ARBITRATION UNDER THIS AGREEMENT SHALL BE HELD ONLY AT THE FACILITIES OF, BEFORE AN ARBITRATION PANEL APPOINTED BY, AND PURSUANT TO THE RULES OF THE NEW YORK STOCK EXCHANGE, INC., OR THE NATIONAL ASSOCIATION FOR SECURITIES DEALERS, INC.” (Petition 11 3, quoting § 25 [a] of Customer Agreement, annexed as exhibit A thereto.) *609The underlying arbitration arises out of ICMC’s claims that petitioners committed common-law and <mask> in connection with the hedge fund, and that Bear Stearns failed to process and revoked ICMC’s alleged irrevocable redemption of its investment in the hedge fund in October 2006 (see petition 1i 6, exhibit B annexed thereto). In the statement of claim, filed on July 25, 2008, ICMC sought recovery for breach of contract, negligence, promissory estoppel, fraud, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and negligent misrepresentation. It sought, in addition to other damages, reasonable attorneys’ fees, and other costs and expenses (exhibit B to petition, statement of claim 1f 106). Petitioners filed a statement of answer in which they denied all claims and any liability, asserted affirmative defenses, and requested that ICMC be directed to pay costs, fees and expenses, including reasonable attorneys’ fees (exhibit C to petition, statement of answer at 24).


The general purpose of the CSL is to protect the public against the imposition of unsubstantial, unlawful and fraudulent stock and investment schemes and the securities based thereon. ( People v. Rankin (1958) 160 Cal.App.2d 93, 96, 325 P.2d 10 ; see also People v. Martinson (1986) 188 Cal.App.3d 894, 899, 233 Cal.Rptr. 617 [intent behind Corp. Code, § 25530 was to create governmental cause of action to protect investing public].) In its complaint against Investco M&D, the promoters, and the Investco AV LLCs, the DBO stated that it was bringing the action "in the public interest in the name of the People of the State of California." The <mask> scheme at issue targeted the investing public in California and reached hundreds of individual investors, raising approximately $22,725,000. Thus, the statutory rights under the CSL enforced here were important and affected the public interest.


*585By letter dated October 18, 2004, counsel for Wyly wrote to Barry Weprin, Esq. of respondent Milberg Weiss Bershad & Schulman, LLP to request that a motion be filed pursuant to rule 60 (b) of the Federal Rules of Civil Procedure to relieve the settlement class from the final judgment approving the settlement. The request was based on (i) a guilty plea by Steven Woghin, CA’s former general counsel, who admitted that he had impeded the governmental investigation of CA’s accounting practices in 2002, and (ii) the revelation in a September 24, 2004 Wall Street Journal article that CA’s outside counsel had in its possession 23 boxes of previously undisclosed documents that purportedly indicated that CA engaged in <mask>, and that its employees made false statements to lawyers and governmental investigators. The letter also noted that Mr. Weprin had represented that he knew nothing about the 23 boxes of documents until the publication of the Wall Street Journal article.


In this instance, that is even more clear as Kinder Morgan, like Comforce, could have purchased errors and omissions coverage but declined to do so. (See, e.g. Bank of the West v. Superior Court, supra, 2 Cal.4th 1254, 1276-1277, 10 Cal.Rptr.2d 538, 833 P.2d 545 [rejecting broad interpretation of " 'advertising injury' " because insureds only reasonably expect such broad coverage by purchasing additional, e.g., errors and omissions, liability coverage]; Allstate Ins. Co. v. Interbank Fin. Servs. (1989) 215 Cal.App.3d 825, 831, 264 Cal.Rptr. 25 [explaining that it was unreasonable for insured to expect CGL policy to cover <mask> and noting that if such coverage had been desired a professional liability policy could have been obtained].) It can be reasonably inferred that, at the outset, Comforce understood that the ACE commercial umbrella policy provided no coverage for claims arising out of its professional services. Just as Comforce did not expect that its policy would cover claims of professional errors, Kinder Morgan could not reasonably expect that such claims would be covered under the policy.


The first and second causes of action of plaintiff’s complaint assert State securities law violations, specifically alleging violations of subdivisions 1 and 2 of section 352-c and section 339-a of the General Business Law. However, just as the time-deposit accounts herein are not securities within the meaning of the Federal Securities Act of 1933 (US Code, tit 15, § 77a et seq.) and Securities Exchange Act of 1934 (US Code, tit 15, § 78a et seq.) (Marine Bank v Weaver, 455 US 551), so they are not securities or commodities as defined in section 352 of the General Business Law or within the meaning of section 339-a of the same statute. (See, generally, Matter of Gardner v Lefkowitz, 97 Misc 2d 806, 812.) Inasmuch as plaintiff’s allegations fail to state a cause of action for <mask>, the first and second causes of action of her complaint are insufficient.


Milken and Levine have served time for their convictions of felonies and have been fined substantial sums. Their company, the investment brokerage house of Drexel Burnham Lambert, itself ultimately pleaded guilty to mail and <mask> for its part in the crimes on September 1, 1989 and agreed to pay $650 million in criminal and civil penalties. It also settled a complaint filed against it by the Securities and Exchange Commission (SEC).


On April 18, 1991, respondent was convicted, upon a plea of guilty, in the United States District Court for the District of Nevada, of one count of conspiracy to commit <mask>, in violation of 18 USC § 371 and 15 USC § 77q (a) and § 77x, a felony under the United States Code. On August 25, 1993, respondent was sentenced to one year of "administrative” probation and a $5,000 fine. Respondent’s probation has been completed. Respondent’s conviction resulted from filing a registration statement with the Securities and Exchange Commission (SEC) that failed to disclose that the named officers and directors were mere figureheads and that actual control of the corporations was by third parties and that stated falsely that the nominee officers and directors had purchased stock in the corporation.


Charles Edward Ramos, J. This is a declaratory judgment action brought to resolve a controversy regarding insurance coverage for numerous <mask> lawsuits brought by individuals, classes of individuals and regulators against the Xerox Corporation and many of its present and former directors and officers based on their alleged fraudulent reporting of Xerox’s finances from 1997 through 2000.1 In this action, plaintiff National Union Fire Insurance Company of Pittsburgh, Pa. contends that the directors and officers insurance policy it issued to Xerox does not afford coverage to defendants with respect to these lawsuits, and/or that the policy should be rescinded based on the failure to satisfy a condition precedent, fraudulent inducement and/or the doctrine of good faith and fair dealing.


On August 11, 2004, Strafaci pleaded guilty in the Southern District of New York to one count of criminal <mask>, admitting that he knowingly, willfully and intentionally made untrue statements of material fact in connection with his valuation of the securities contained within the portfolios of Lipper Convertibles and the Series II Fund. At his sentencing on May 20, 2005, the District Court (Swain, J.) observed, “His motive in undertaking this conduct is not clear to me. It was, however, clearly not his motive simply to maximize his own financial gain.” (Transcript at 42.) In 2006, the Securities and Exchange Commission (SEC) charged Lawrence Stoler, the PricewaterhouseCoopers (PwC) partner assigned to the Lipper account, with knowingly, recklessly, and/or negligently ignoring generally accepted auditing standards and generally accepted accounting principles in conducting the 2000 audit. Stoler entered into a consent order in which the SEC found, among other things, that Stoler ignored, discounted, or failed to apprise himself of the substantial audit evidence that Strafaci’s valuations were materially overstated.


"It is settled in this State that there are limits upon the power of public officials authorized to issue subpoenas. In the *171leading case of Carlisle v. Bennett (268 N. Y. 212, 217-218) it was stated that the power of the Attorney-General in investigating alleged <mask>, is necessarily limited to a 'proper case’, 'one where the books and papers * * * have some relevancy and materiality to the matter under investigation [citations omitted].’ The court further stated that the statutory authorization to issue subpoenas would not be construed to allow the Attorney-General to embark upon a roving course to pry into the affairs of any person.


“[T]he Securities Act of 1933 (15 U.S.C. 77a et seq.), the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), the Sarbanes-Oxley Act of 2002, the Public Utility Holding Company Act of 1935 (15 U.S.C. 79a *211et seq.) . . the Trust Indenture Act of 1939 (15 U.S.C. 77aaa et seq.), the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), the Investment Advisers Act of 1940 (15 U.S.C. 80b et seq.) . . ., and the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.).” (15 USC § 78c [a] [47].) Additionally, “the doctrine of equitable tolling does not apply to the statute of limitations in <mask> cases.” (De la Fuente v DCI Telecom., Inc., supra, 259 F Supp 2d 250, 263 [2003].) Finally, “in applying the Statute of Limitations [courts] look for the reality, and the essence of the action and not its mere name.” (Brick v Cohn-Hall-Marx Co., 276 NY 259, 264 [1937]; Meyer v Shearson Lehman Bros., 211 AD2d 541 [1st Dept 1995]; see also von Bulow by Auersperg v von Bulow, 657 F Supp 1134, 1140 [SD NY 1987] [“(w)hen applying a statute of limitations, courts look at the essence of the stated claim and not the label by which plaintiff chooses to identify it” (internal quotation marks omitted)].) Petitioner argues that all of respondent’s claims arise from petitioners’ investment of her money, are governed by 28 USC § 1658 (b), and under CPLR 7502 (b), require the court to permanently stay the arbitration.


The trial court dismissed plaintiffs’ fraud claims on the basis of collateral estoppel, holding that the dismissal of plaintiffs’ <mask> claims in federal court precluded plaintiffs’ common law fraud claims. “Collateral estoppel bars relitigation of an issue in a new action arising between the same parties or their privies when the earlier proceeding resulted in a valid final judgment and the issue in question was actually and necessarily determined in that prior proceeding.” Leahy v Orion Twp, 269 Mich App 527, 530; 711 NW2d 438 (2006). Collateral estoppel may bar subsequent litigation in state courts based on issues determined in a prior federal action. Pierson Sand and Gravel, Inc v Keeler Brass Co, 460 Mich 372, 380-381; 596 NW2d 153 (1999). The trial court also held that, in any event, plaintiffs failed to plead the necessary elements of fraud.


In contrast, in Matter of Schmidt v Roberts (74 NY2d 513, 522 [1989]), the Court of Appeals held that a defendant convicted of the federal crimes of interstate transportation of stolen property (18 USC § 2314), and conspiracy to commit that crime (18 USC § 371), could not be prosecuted in New York for grand larceny in the second degree, former Penal Law § 155.35, now Penal Law § 155.40. The Court concluded that the federal and state crimes were not designed to prevent very different kinds of harm or evil, since “[t]he Federal crime of interstate transportation of stolen property and the State crime of larceny are both designed to punish thieves and to protect property owners from thefts.” (Id.) Similarly, the federal wire fraud statute and New York’s scheme to defraud are both designed to protect the unwary from schemes to deprive them of their property by fraud. Thus, scheme to defraud in the first degree and wire fraud are not, as CPL 40.20 (2) (b) requires, designed to prevent very different kinds of harm or evil. (See also Matter of Kaplan v Ritter, 71 NY2d 222, 230-231 [1987] [“counts in the New York County indictment, which charge petitioners with <mask> and grand larceny, cannot be prosecuted (pursuant to exceptions in CPL 40.20 [2] [b] and [e]) in light of the prior Federal prosecution for RICO violations and fraud”].)


for further investigation and possible criminal prosecution. Request Letter at 3. SEC staff contemplates that a significant part of the FST’s investigative efforts would involve contacting individuals suspected of conducting criminal <mask> schemes through e-mail, mail, or telephone. Id. at 3–4. FST investigators would pose as potential investors in the schemes and seek information from the promoters in an attempt to develop evidence to support criminal prosecutions. Id. at 4. A cadre of SEC staff members would be designated to serve on the FST and would be specially trained and separately supervised in connection with their FST activities. Request Letter at 4–5. 2 The FST would under- take an investigation only if its staff had a bona fide basis to believe that the targets were engaged in conduct amounting to a criminal violation of one of the securities laws. Id. at 4. The FST would maintain the infor- mation that it collected in its investigations in a separate system of rec- ords, which would not be utilized for other purposes and would not be generally accessible to Commission staff performing non-FST duties. Id. at 5; E-mail for Matthew D. Roberts, Senior Counsel, OLC, from George S. Canellos, Director, New York Regional Office, SEC (Dec. 22, 2011, 5:02 PM) (“Follow-up E-mail”). Limited, summary information in the FST records system—for example, a description of the general nature of the information that prompted the investigation, the persons or entities contacted, and the other investigative steps taken—would, however, subsequently be recompiled into another SEC records system or systems, which would be more broadly available to Commission staff. Request Letter at 5 & n.9; Follow-up E-mail.


Similar issues arose in United States v Metter (860 F Supp 2d 205 [ED NY 2012, Irizarry, J.]), a <mask> overseizure case in which the court suppressed computer files recovered from the defendant’s home and business as well as personal email messages which had been obtained from his Internet service providers.19 Fifteen months after the initial seizure, the government had not yet completed its privilege review or determined whether any of the seized material fell outside the scope of the warrants. The court concluded the government’s 15-month delay in isolating responsive communications constituted a search and seizure in violation of the Fourth Amendment because of the unreasonable period of time the government had consumed searching the defendant’s files. The court did not address the third-party doctrine, although part of the materials which were suppressed were email communications seized from ISPs. Thus, the court apparently implicitly recognized that the third-party doctrine was not applicable to those seizures.


The Court of Appeals also looked to the legislative intent underlying the Martin Act: "The majority of this court holds that an implied private action is not consistent with the legislative scheme underlying the Martin Act and, specifically, section 352-c; that the specific purpose of the statute was to create a statutory mechanism in which the Attorney-General would have broad regulatory and remedial powers to prevent fraudulent securities practices by investigating and intervening at the first indication of possible <mask> on the public and, thereafter, if appropriate, to commence civil or criminal prosecution; and that consistency of purpose with the *598statute includes consistency with this enforcement mechanism (see, General Business Law §§ 352, 353, 353-a, 354, 358; Kaufman, Practice Commentaries, McKinney’s Cons Laws of NY, Book 19, General Business Law art 23-A, at 19-20).” (CPC Intl. v McKesson Corp., 70 NY2d 268, 276-277, supra.)


It was stipulated that defendant Norman Forsyth was served with a subpoena issued by the Attorney-General pursuant to article 23-A of the General Business Law (New York’s “Blue Sky” law) requiring his appearance at the office of the Attorney-General on August 31, 1979. It was *235undisputed that defendant was aware that the purpose of the subpoena was to seek the defendant’s testimony in an investigation of <mask> of which he was the prime suspect. Defendant had, pursuant to earlier subpoenas and upon adjourned dates requested by him, appeared at the office of the Attorney-General. Following his failure to appear on an adjourned date, the subpoena, which is the subject of this indictment, was served upon him.


In April, 1973, Vall became employed as a salesman for a commodities brokerage firm known as Collins and Day. That firm ceased operations some time in June, 1973, with substantial losses to its clients. Thereafter an investigation was commenced by the Attorney-General. That investigation revealed that neither the firm, its principals nor *1001its salespeople were registered and licensed to sell securities in this State and that Collins and Day was what is colloquially known as a “bucket shop”. The loss to investors was estimated to be in excess of $2,000,000. As a result the Attorney-General obtained indictments against the principals of Collins and Day as well as all of its salespeople. Vail was indicted and charged with 35 counts of grand larceny in the second and third degree; the sale of securities without a license; and <mask> under the Martin Act. Prior to trial Vail entered a plea of guilty to a violation of section 359-e of the General Business Law (failure to register as a salesman), a misdemeanor, and this plea was accepted to cover the entire indictment. Vail received a sentence of incarceration for four successive weekends and was fined $500. The sentencing Judge thereafter granted Vail a certificate of relief from civil disabilities pursuant to section 702 of article 23 of the Correction Law. A civil proceeding pursuant to the Martin Act was then initiated by the Attorney-General to obtain orders permanently enjoining all the defendants in the Collins and Day operation from participating in the purchase and sale of securities. Vail subsequently consented to the entry of judgment and the permanent injunction which he now seeks to dissolve


Furthermore, unlike the newspaper's success on the motion to unseal in Savaglio , respondents' success was not "ancillary" or "entirely unrelated to the objective of the lawsuit." ( Savaglio , supra , 149 Cal.App.4th at p. 603, 57 Cal.Rptr.3d 215.) The interlocutory judgment and order setting forth the powers and duties of the special master comprised the core relief negotiated in the DBO action. The trial court sharply criticized this settlement structure in several respects, referring to one of the key terms as "illusory," and respondents were successful in causing substantive changes to be made to the settlement. These successes were related to the objective of the DBO action because, *611in the court's reasonable view, they provided better protections to the victims of the <mask>.


In October 1986, the petitioners filed suit in the United States District Court for the Southern District of New York claiming that Drexel, through one of its agents, had engaged in fraudulent transactions in violation of Federal securities laws and the Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USC § 1961 et seq.) and in breach of its fiduciary duties to the petitioners.2 At the time there was disagreement among the several circuits concerning the arbitrability of. controversies involving securities transactions. However, since this specific issue was before the United States Supreme Court, the District Court (Conner, J.) stayed the action pending the resolution of that case. In Shearson/American Express v McMahon (482 US 220), the Supreme Court held the provisions of the FAA applicable to RICO and <mask> claims. Thereafter, petitioners discontinued the Federal action.


Movants in their counterclaim allege plaintiffs intentionally and tortiously induced the breach of a settlement agreement entered into on July 12, 1990, of an action then pending in Illinois. Beigel & Sandler, Ltd., the predecessor firm of plaintiffs’ counsel herein, specifically entered into that agreement on its *31clients’ and on its own behalf. The defendants James Haber and Harvey Minors were also defendants in the Illinois action; and the settlement agreement was entered into on their behalf. The claims in the Illinois action which were resolved included claims of <mask> and Racketeer Influenced Corrupt Organizations violations unrelated to this action. Movants allege that plaintiffs, by retaining the Beigel firm to represent them in the instant action, caused the Beigel firm to breach paragraph 10 of the settlement agreement which prohibits the Beigel firm from representing or assisting claimants asserting certain claims against Haber, such as the claims asserted herein.


Plaintiff Gordon Ostojic seeks to enforce an agreement purporting to settle a federal <mask> action that he and 54 other plaintiffs (together, the SDNY plaintiffs) commenced in the United States Court for the Southern District of New York against defendants Life Medical Technologies, Inc. and its former CEO and president Carol Fitzgerald, both of whom are the defendants in the action underlying this appeal. Eventually, the parties to the federal action agreed to settle. As a result of the parties' agreement, the federal court granted an order of discontinuance dismissing the action without prejudice, stating that if the matter were not settled within 30 days of the order, the parties were obliged to make a letter application within the 30-day period, requesting that the matter be reinstated. Ostojic alleges that although the parties orally agreed upon a final written settlement agreement that settled all material terms, defendants never signed the agreement. Furthermore, Ostojic alleges, because no party requested that the matter be reinstated, the SDNY lost jurisdiction over the matter. Ostojic maintains that although he performed all conditions and promises required of him by the proposed settlement agreement, defendants failed to make the monetary payments owed to him under the agreement.


Furthermore, the dealers recognize that Ehrlich-Bober (supra) is a State court doctrine inapplicable in Federal court. Greater governance over the financial markets in New York is provided by Federal law than by State law. And yet, for example, <mask> claims can be brought in any district in the country and, notwithstanding the possibility of nationwide cacophony in judicial rulings, the securities markets function. This suggests that disaster will not befall plaintiffs and the market in Government securities if the Ehrlich-Bober doctrine is not transformed into exclusive New York jurisdiction over cases involving the markets.


3 In accord with Dun & Bradstreet, lower courts considering credit rating agencies’ First Amendment defenses to claims for defamation, fraud, and various other business torts (as well as breach of contract in at least one instance) have looked in part to whether the reports were distributed to a public audience or tailored to a discrete group of clients. See, e.g., Compuware Corp. v. Moody’s Investors Servs., Inc., 499 F.3d 520, 525–34 (6th Cir. 2007) (affirming grant of summary judgment in favor of credit rating agency defend- ant on defamation and breach of contract claims based on “actual malice” requirement where ratings were made available to the public); Abu Dhabi Commercial Bank v. Morgan Stanley & Co., No. 08-Civ-7508 (SAS), 2009 WL 2828018, *9 (S.D.N.Y. Sept. 2, 2009) (rejecting First Amendment defense to various common law tort claims, including fraud, in part because “plaintiffs have plainly alleged that the . . . ratings were never widely disseminated, but were provided instead in connection with a private placement to a select group of investors”); In re Nat’l Century Fin. Enters., Inc., Inv. Litig., 580 F. Supp. 2d 630, 640 (S.D. Ohio 2008) (rejecting First Amendment defense to <mask> and various common law claims in part because ratings disseminated to a “select class of investors”); In re Enron Corp., 511 F. Supp. 2d 742, 820 (S.D. Tex. 2005) (finding that the First Amendment shielded credit rating agency from negligent misrepresentation claim where the “credit rating reports regarding Enron by national credit rating agencies were not private or confidential, but distributed ‘to the world’ and were related to the creditworthiness of a powerful public corporation that operated internationally”). At least one court of appeals has invoked the same consideration as one of its reasons for ruling that a credit rating agency could not avail itself of a statutory state-law journalist’s privilege to refuse to comply with a subpoena. In re Fitch, Inc., 330 F.3d 104, 109 (2d Cir. 2003) (“Unlike a business newspaper or magazine, which would cover any trans- actions deemed newsworthy, Fitch only ‘covers’ its own clients.”); see also id. at 110 (“Fitch’s information-disseminating activity does not seem to be based on a judgment about newsworthiness, but rather on client needs. We believe this weighs against Fitch being able to assert the privilege for the information at issue.”).


Consumer Cause and Karuk Tribe are distinguishable in that they involved procedural successes that did not result in any substantive changes. In Karuk Tribe , the fee claimants simply obtained a court order requiring a regional water quality control board to provide an "augmented explanation" on the same decision it had previously made. ( Karuk Tribe , supra , 183 Cal.App.4th at p. 369, 108 Cal.Rptr.3d 40.) In Consumer Cause , the fee applicant's successful objection to a class action settlement simply "[f]ree [d] [the] putative class members from *465the constraints of a proposed settlement agreement they had the right to disregard by exercising their opt-out right." ( Consumer Cause , supra , 127 Cal.App.4th at p. 404, 25 Cal.Rptr.3d 514.) In contrast, respondents obtained actual, substantive changes to the interlocutory judgment and special master's powers that, in the trial court's reasonable estimation, better protected hundreds of victims of <mask>. The trial court did not abuse its discretion in finding that an important public right was enforced.


The DBO argues that respondents did not enforce any such rights in relation to the DBO because the only CSL violations at issue were those of the moving defendants. However, as discussed above, the DBO was an "opposing party" in this context because it stood on opposite sides of respondents in the context of the motion to modify. During these proceedings, the trial court took seriously the concerns raised by *615respondents about due process, lack of notice to the investors, and "cutting off their rights to sue," and criticized the settlement terms negotiated by the DBO. Even if these matters did not rise to the level of strict constitutional violations, the trial court reasonably concluded that the efforts of respondents strengthened the settlement in ways that were important to hundreds of victims of <mask>.


There is scant decisional precedent to guide the court on this question. In United States v Chiarella (588d 1358 [2d Cir 1978]), the federal Court of Appeals affirmed the District Court’s ruling that in a <mask> and insider trading case, as a matter of federal law, the apparent state-court privilege embodied in Labor Law § 537 yields to federal rules and precedent. The court noted that Federal Rules of Evidence rule 501 and established precedent show a strong federal policy favoring admissibility of the type of statement which Labor Law § 537 appears to protect. The court specifically declined to decide whether section 537 creates a privilege under New York law, since the court did not need to resolve that question in order to decide its own case.


We conclude the trial court did not abuse its discretion in finding that respondents: were successful parties against the DBO, Investco M&D and the promoters; enforced an important right affecting the public and a large group of <mask> victims; and provided necessary, non-duplicative, and significant benefits to this group of investors, while incurring litigation expenses that were out of proportion to their personal interests. Accordingly, we affirm.


The complaint further alleges that Boesky also pleaded guilty and settled charges of <mask>, implicating Michael Milken, the head of Drexel’s high yield bond division. Michael Milken and other Drexel employees (Lowell Milken, Cary Maultasch, Bruce Newberg, Martin Siegel and Pamela Mouzert) were charged with securities fraud involving the shares of numerous companies from 1984 to 1986 including insider trading, stock parking and manipulation. Milken pleaded guilty in 1990 to six felony counts including conspiracy, securities fraud and mail fraud, agreed to pay $200 million in fines and penalties, and $400 million to defray claims against him.


These consolidated appeals challenge the award of attorney fees to respondents Kim Agasaveeran and Jeffrey Bryant (respondents) under Code of Civil Procedure section 1021.5 ( section 1021.5 ). Respondents specially appeared in an already-settled <mask> action brought by the Commissioner of the Department of Business Oversight (DBO) against real estate investment company Investco Management & Development LLC (Investco M&D) and its promoters, Christopher P. Epsha, Steven G. Thompson, Barry D. LeBendig, and Douglas R. Hanson (the promoters). Respondents-victims of the securities fraud-successfully opposed a motion that would have stayed all individual actions by them and other defrauded investors against these defendants. Respondents also raised several issues concerning the fairness of the settlement, resulting in substantive changes to the stipulated interlocutory judgment *602and special master order in the DBO action.


Charge One alleges that the respondent was convicted of a serious crime within the meaning of Judiciary Law § 90 (4) (d) and within the meaning of section 691.7 (b) of the Rules Governing the Conduct of Attorneys within this Department (22 NYCRR). On March 21, 1994, the respondent pleaded guilty before the Honorable Jack Mackston of the Nassau County Court, Trial Term, Part VI, to a charge of intentional real estate <mask>, in violation of General Business Law § 352-c (1) (c) (iv), a class A misdemeanor. The crime of which the respondent was convicted involves false swearing, misrepresentation, or fraud.


The regulation of the purchase and sale of securities pursuant to the Martin Act is a creation of the Legislature and the primary purpose of the statute is remedial in character (People v Lexington Sixty-First Assoc., supra; People v Federated Radio Corp., 244 NY 33). As such it is the prerogative of the Legislature to establish the availability and applicability of the remedy and in so doing does *1004not infringe upon the jurisdiction of the court (People ex rel. Durham Realty Corp. v La Fetra, 230 NY 429). Section 359-g is penal in operation (People u Federated Radio Corp., supra) and it is within the authority of the Legislature to punish those convicted of fraud in connection with the purchase and sale of securities (Defiance Milk Prods. Co. v Du Mond, 309 NY 537). In the context of the Martin Act, the Legislature has stated that the remedy of dissolution or modification of the injunction is not available to those convicted of <mask> (NY Legis Ann, 1963, pp 107-108). This is a clear proscription of the jurisdiction of the court and is binding (Thrasher v United States Liab. Ins. Co., supra; People v Darling, supra).


Irving Lang, J. In this habeas corpus proceeding, petitioner contests his rendition to the State of Alabama to answer an indictment for <mask> on two unusual grounds. First, he claims that no date is alleged in the indictment, thereby depriving him of the constitutional and statutory right to resist extradition on the ground that he was not in the demanding State at the time of the commission of the alleged offense. Secondly, he claims that the specific acts of which he is accused do not substantially charge him with a crime under Alabama law. Rather, he asserts the demanding State is attempting to use criminal process to enforce what is a civil obligation. He claims that since the indictment does not "substantially charge the person demanded with having committed a crime under the law” of Alabama, the writ should be granted (CPL 570.08).


Several months after closing on the loan, respondent and his brother continued to deceive the Bi-Coastal investors concerning Larry’s criminal status. The investors claimed that only after they learned about Larry’s guilty plea did they audit GTI’s books and discover its true state of insolvency and serious tax delinquencies. The Bi-Coastal investors sued respondent and his brother for <mask>, inter alia, in Federal District Court in New Jersey in 1988, asserting that misrepresentations and failures to disclose had been material to their making of the loan. During the course of that lawsuit, respondent submitted under oath an allegedly doctored bank statement misrepresenting the status of his account prior to closing on the loan.


The SEC sued Ms. Baylor, the Baylor & Jackson law firm, the Milan Group, Inc., and other individuals as “Principal Defendants” for conducting an alleged <mask> from which victims suffered losses amounting to millions of dollars. See S.E.C. v. Milan Group, 962 F. Supp. 2d 182 (D.D.C. 2013), aff’d in part, vacated in part, 595 Fed. Appx. 2 (D.C. Cir. 2015). Ms. Jackson was named as a “Relief Defendant,” which the District Court described as a “person[] who allegedly received money resulting from the fraudulent activities but who [is] not charged with personally engaging in the fraud.” Milan Group, 962 F. Supp. 2d at 186. During the pendency of the case and trial, the SEC required that Ms. Jackson keep the Baylor & Jackson law firm intact as “a going concern” to preserve the law firm’s accounts and assets that would eventually contribute toward the monetary judgment to satisfy the victims’ monetary losses. The District Court entered summary judgment against Ms. Baylor, the Baylor & Jackson law firm, and other defendants jointly and severally liable for over $2.6 million in ill-gotten profits. Id. at 211. The money judgment was affirmed by the United States Court of Appeals for the District of Columbia Circuit in 2015. Milan Group, 595 Fed. Appx. at 2.


There are two California cases which are on point. Bradshaw v Pardee (78 Cal App 3d 567) was cited by the defendant and discussed in his brief but, unfortunately, the opinion was deleted from the reporter on the direction of the California Supreme Court for an unstated reason. According to the defendant’s brief, the case concerned a client who pleaded guilty to a criminal charge on the advice of counsel. The client later brought a malpractice action against the attorney, alleging that he was negligently advised to plead guilty. The court dismissed the complaint on the theory that the client’s prison sentence was caused by his guilt and not the lawyer’s alleged negligence. In Weiner v Mitchell, Silberberg & Knupp (114 Cal App 3d 39), a former client who had been convicted of <mask> brought an action charging his former attorneys with malpractice in the criminal case. The California Court of Appeal, Second District, Division 3, noted that the client’s conviction estopped him from relitigating the issue of guilt. The court then unanimously held (p 48) “we must, therefore, accept as the proximate cause of his indictment, and of all the damages which occurred to him by reason of it, his guilt and his guilt alone. This means that all of the various causes of action alleged in tort against defendants in plaintiff’s second amended com*435plaint founder on the complete lack of proximate causation between the torts alleged therein and the injuries plaintiff allegedly suffered thereby. Stated otherwise, without proximate causation between the torts alleged and the damages allegedly suffered, there can be no cause of action in tort.”


In determining that a failure by FNIC to exercise reasonable supervision over its securities salespeople in a branch office can be a violation of the Martin Act, this court relies upon the following. When passing securities legislation, Congress has always preserved a role for state “blue sky” laws, which predated the federal securities laws of the 1930s, including the Securities Act of 1933 and the Securities Exchange Act of 1934 (see Mihaly and Kaufmann, Introduction and Commentary *999Overview, Securities, Commodities and Other Investments, McKinney’s Cons Laws of NY, Book 19, General Business Law art 23-A, at 11-12; see also Matter of Gardner v Lefkowitz, 97 Misc 2d 806, 812-813 [Sup Ct, NY County 19783). Further, despite FNIC’s allegation that the Martin Act does not specifically address the issue of broker-dealer supervision, section 353 clearly addresses secondary liability for <mask>, providing that the Attorney General may seek relief for fraudulent practices against a perpetrator as well as “any other person or persons theretofore concerned in or in any way participating in or about to participate in such fraudulent practices” (General Business Law § 353 [1] [emphasis supplied]). Here, FNIC hired certain of the other defendants as its representatives and clothed them with the “good name” of a national broker-dealer. If, as alleged by plaintiff, FNIC failed to adequately train or supervise the individuals who operated with FNIC’s express authority in selling other products, FNIC was necessarily “concerned in” the FNIC individual defendants’ fraudulent outside sales practices.


After Howard's employment was terminated in 2013, he signed a "Separation Agreement and Release" (the separation agreement). The agreement recited that the parties wished to resolve "any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that [Howard] may have against the Company and any of the Company Releasees as defined below, including, but not limited to, any and all claims arising out of or in any way related to [Howard's] employment with or separation from the Company." As "Consideration," Kaggle agreed to continue paying Howard's base salary and health benefits for four months, and accelerated the vesting date of some of the restricted shares that had not yet been released under the stock agreement. The parties also agreed on how to determine the number of shares in which he was entitled to be vested. Howard agreed to release Kaggle from all claims "relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that [Howard] may possess against any of the Company Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement , including, without limitation: [¶] a. any and all claims relating to or arising from [Howard's] employment relationship with the Company and the termination of that relationship; [¶] b. any and all claims relating to, or arising from, [Howard's] right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any rights under an Equity Arrangement dated October 25, 2011 between [Howard] and Anthony Goldbloom, claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under any applicable state corporate law, and <mask> under any state or federal law ..." (Italics added.)


*470Talley v. Valuation Counselors Group, Inc. (2010) 191 Cal.App.4th 132, 119 Cal.Rptr.3d 300 ( Talley ) addresses the nature of "appropriate proceedings" to obtain relief from a later judgment. The plaintiff in Talley sued three individual defendants and two corporate defendants in state court for <mask>. The plaintiff also initiated a related federal court proceeding. The state trial court sustained, without leave to amend, demurrers in favor of the defendants. In Talley v. Miller & Schroeder (Sept. 12, 2007, D048438) [nonpub. opn.], the Court of Appeal had affirmed the judgments in favor of three individual defendants and reversed and remanded for further proceedings the judgments in favor of the two corporate defendants. (Talley, supra , 191 Cal.App.4th at pp. 136-137, 119 Cal.Rptr.3d 300.) On remand, the trial court again sustained, without leave to amend, demurrers by the corporate defendants, and judgment was entered in their favor. ( Id. at p. 137, 119 Cal.Rptr.3d 300.) The plaintiff neither made a direct attack on that judgment by appeal nor obtained a stay order pending the resolution of his related federal court action. ( Ibid. ) After the Court of Appeal's decision became final and the time for California Supreme Court review had passed, the Ninth Circuit issued its decision "analyzing, modifying and narrowing the Bar orders" that had served as the basis for the earlier judgments based on the demurrers. ( Id . at pp. 137, 141, 119 Cal.Rptr.3d 300.)


On January 30, 1990, Moore & Schley filed a petition for reorganization under chapter 11 of the Bankruptcy Code. In March 1990, Moore & Schley submitted written proofs of loss to the defendants based upon the dishonest and fraudulent acts of Militano and Sonneberg. In March 1991, after waiving indictment, Militano pleaded guilty to conspiracy to commit <mask> and making a false statement to a Federal official, and Sonneberg pleaded guilty to conspiracy to commit securities fraud. In April 1991, defendants disclaimed coverage. The SEC’s civil action against Militano and Sonneberg culminated in a judgment against them enjoining them from engaging in securities fraud and requiring them to disgorge their profits.


The rules of a private industry self-regulating group cannot deprive a state securities commission of jurisdiction over such an important area of <mask>. Instructive on this point is Jones v Securities & Exch. Commn. (115d 1173 [4th Cir 1997], cert denied 523 US 1072 [1998]), a case cited by FNIC. Jones ruled that res judicata did not bar the SEC from prosecuting an individual defendant after he had already been sanctioned by the NASD for the identical conduct (id. at 1180). The Fourth Circuit reviewed the statutory scheme for supervision of securities salespeople, among other issues:


Levine was indicted in 1986 for <mask> and other crimes to which he pleaded guilty, and he also settled charges against him brought by the SEC, agreeing to disgorge his gains. Drexel notified the insurers on September 4, 1986 that *207Levine had been charged with insider trading and had pleaded guilty to the criminal charges and had settled with the SEC in June, and that as a result claims by third parties against Drexel might thereafter be asserted.


Barbara Gunther Zambelli, J. Defendant is charged with three misdemeanor counts of <mask> in violation of section 352-c of the General Business Law, also known as the Martin Act. He moves to dismiss the accusatory instrument filed against him on three grounds: (1) the District Attorney lacks authority to prosecute violations of the Martin Act; (2) the District Attorney must be disqualified because of a conflict of interest; and (3) the prosecution is barred by the Statute of Limitations.


Plaintiff was sued in federal court, in the Southern District of New York, in several actions alleging <mask>, together entitled In Re Forest Labs., Inc. Sec. Litig. (US Dist Ct, SD NY, No. 05-CV-2827-RMB, Berman, J.). The securities action was settled for $65 million, which was paid by plaintiff. Plaintiff claims that considerable unpaid extra claims and defense costs exist, adding several millions of dollars over the $65 million settlement amount.


A partner at First Investors’ primary outside accounting firm states that FICON was not insolvent at the time of The Contested Transactions; that as of December 31, 1989 FICON had "reported stockholders’ equity of approximately $83 million”; that as of December 31, 1990 FICON had "reported stockholders’ equity of approximately $76 million”; that FI-CON was actually worth more than the $83 million book value of its outstanding shares; that contrary to plaintiff’s assertion, and for "several reasons” (e.g., plaintiff’s calculations omit both "net investment income earned” and "gains earned by investors prior to the limited time period 1987 to 1990 used by the State to calculate losses”), First Investors was not liable for a total restitution of $1.6 billion to investors at the time of The Contested Transactions; that at the time of The Contested Transactions as a matter of general accounting practice, no liability attached to First Investors pursuant to the instant suit since (1) it was not "probable” that there would be a loss, and (2) as an independent ground, the amount of any loss could not reasonably be estimated. Defendants note that plaintiffs damage calculations assume that every investor in First Investors was the victim of fraud, whereas a plaintiff in a <mask> suit can only collect net losses which stem from defendant’s fraudulent act(s) (see, Abrahamson v Fleschner, 568d 862, 878 [2d Cir 1977]). Plaintiff rejoins that "a contingent liability * * * must be reduced to its present, or expected, value before a determination can be made whether the firm’s assets exceed its liabilities.” (Matter *218of Xonics Photochemical, 841d 198, 200 [7th Cir 1988] ["(t)o value (a) contingent liability it is necessary to discount it by the probability that the contingency will occur”].)


Plaintiffs’ fraud claim is based in part on the general contention that Adcock undervalued the Company’s performance, which undermined the value of the stock to be redeemed under the Warrants. Having determined that the Company properly regarded all but Angelo Jr.’s warrants as expired, this claim applies only to Angelo Jr.’s Warrant. Plaintiffs’ <mask> claim in federal court alleged a violation of the Securities Exchange Act, 15 USC § 78j(b), and Securities and Exchange Commission Rule 10b-5, 17 CFR § 240.10b-5, for precisely that reason: that Adcock and the Company had intentionally undervalued the Company’s stock price in an effort to manipulate the value of the Warrants. Iafrate, 827 F Appx at 546-547. Consistent with the allegations in the complaint in this matter, the federal courts observed that Adcock admitted to the undervaluing to Angelo Jr. before Angelo Jr. exercised his Warrant. Id. at 551. In Michigan, as in federal courts, an essential element of fraud is that the plaintiff not only relied on a misrepresentation but did so genuinely and reasonably. Cooper v Auto Club Ins Ass’n, 481 Mich 399, 414-415; 751 NW2d 443 (2008).13 Plaintiffs alleged that Angelo Jr. relied on defendants’ “materially false and misleading statements” and upon an earlier presentation regarding the methodology to be used in calculating the fair market value of the stocks. However, as the Sixth Circuit found, Angelo Jr. actually knew that defendants had manipulated the Company’s stock value and, instead of challenging the valuation or suing for breach of contract immediately, he


The defendants have argued that the June 2,1988 extension of the Citron warrant was not based on probable cause because no evidence of <mask> was uncovered during the execution of the original warrant. Eavesdropping warrants must meet the "probable cause” requirements that are applicable to search warrants. (CPL 700.15 [2], [3]; 700.20; People v Tambe, 71 NY2d 492.) A finding of probable cause requires that facts be presented to the issuing officer sufficient to warrant a prudent person to believe that evidence of a crime will be obtained through the use of electronic surveillance. (United States v Fury, 554d, at 530, supra.) Requests for extension of the warrant must, in addition to the requirement of probable cause, contain a statement setting forth the results thus far obtained.


*49On or about July 5, 1994 the respondent was found guilty, after a jury trial in the Supreme Court, New York County, of eight counts of scheme to defraud in the first degree, nine counts of real estate <mask>, three counts of grand larceny in the second degree, three counts of grand larceny in the third degree and one count of offering a false instrument for filing in the first degree. Respondent’s conviction arose out of his participation in the sale of cooperative interests in several different buildings, in connection with which he made false representations and concealed material facts including necessary information about the financial status of the buildings. The Departmental Disciplinary Committee, by petition dated September 20, 1994, has moved for an order striking the respondent’s name from the roll of attorneys pursuant to Judiciary Law § 90 (4) (b) on the ground that the respondent was automatically disbarred upon his conviction of a felony as defined by section 90 (4) (e). Pursuant to Judiciary Law § 90 (4) (a) respondent ceased to be an attorney and counselor-at-law or to be competent to practice as such, upon his conviction of a felony. There is no question that the crimes of scheme to defraud in the first degree, Grand Larceny in the second and third degrees and offering a false instrument for filing in the first degree are all felonies. The facts that the respondent has not yet been sentenced and that there may be a motion to set aside the verdict, do not serve as impediments to the Committee’s petition. For the purposes of disbarment, a conviction occurs at the time of plea or verdict (see, Matter of Kourland, 172 AD2d 77; Matter of David, 145 AD2d 150).


The defendants are charged with 85 counts of <mask>, scheme to defraud, criminal possession of stolen property and grand larceny. The charges arise out of nine alleged fraudulent “pump and dump” penny stock promotion schemes. Defendant Anthony Thompson moves here to suppress approximately 100,000 of his emails recovered in the execution of two search warrants directed to his Internet service providers in 2012.


On Friday, August 7, 1970 an officer of the defendant, one Michael S. Cronin, by telephone conversation with an officer of the plaintiff, one Harold Glenn, advised plaintiff that defendant was returning these 13 checks to the plaintiff unpaid and that he believed they were drawn against uncollected funds, and that if the defendant ended up with a residual balance in Shapiro’s account, after offsetting Shapiro’s obligations to the defendant bank for loans, and after everything settled down, the plaintiff might apply part of the checks being returned against such balance. The two officers on this date and prior during the same week also discussed the suspicion that Harry Shapiro was check-<mask> between the two banks and that the defendant’s officer would return to the plaintiff bank all checks not covered by cash on hand.


Defendant does not dispute its failure timely to place the various documents in the review file, but it vigorously disputes the significance of the omissions in the context of this inherently risky distressed commercial loan auction/sale between sophisticated investor entities. Concerning the August 31 draft financial statement, defendant points out (without contradiction) that it came into the bank’s possession during the brief period between acceptance of plaintiffs bid on September 23 and the closing on September 29, and contends that the omission to include it in the review file cannot be important because it was “completely unreliable” on the subject of inventory valuation and because plaintiff could not have possibly acted differently even if it had bothered to check the Web site and discovered it between bid acceptance and closing. Concerning the check-<mask> documents proved to be in defendant’s possession well prior to submission of the bid, defendant contends that the check kiting by CyTech was “unconfirmed” and that there was, in any event, no requirement that its documents evidencing possible check kiting be included in the review files. Defendant also contends that the check-kiting documents only are duplicative of other information in the file establishing that CyTech was suffering from cash flow difficulties.


Claimant testified that Lieutenant Looney, an officer at Bed-ford Hills, opened her mail without authorization from the Bedford Hills Superintendent as required by DOCS regulations; that she was issued a misbehavior report; that a disciplinary hearing was held at which she was found guilty of the charge of “<mask> Mail” (see exhibit 1, at 1) and confined to keeplock for a period of five days. Claimant further stated that the decision of the hearing officer was reversed on administrative appeal and the matter was expunged from her record (see exhibit 1, at 3). On cross-examination, claimant stated that the incident occurred on May 23, 2000, the hearing was started on June 1, 2000 and completed on June 7, 2000. She further stated that the five days’ keeplock time was served from June 18 to June 23, 2000.


That leaves for consideration whether defendant’s failure to include in the review files material relating to CyTech’s alleged check <mask> in May 2005 independently supports plaintiff’s claim on either a theory of rescission or failure of a condition precedent. Defendant contends that these materials were not even required to be included in the review file by the terms of the asset sale agreement, which excluded “any documents prepared by or for the use of Seller or DebtX regarding the valuation of the loan(s).” (Asset sale agreement, appendix A [definition of review file].) Plaintiff points to a provision of the terms of sale memorandum (111 [a]) which alerted potential bidders that the review files would contain “borrower financials, relevant correspondence and any other material deemed germane to the valuation of the assets being offered” (emphasis supplied). Even if plaintiff could escape the declaration in the terms of sale memorandum that, in the event of conflict, “the terms and provisions of the Asset Sale Agreement shall govern and control,” a dubious proposition at best, plaintiffs reference to the above-quoted language would only render the entire agreement, for purposes of its current motion for summary judg*365ment, ambiguous on the subject thus requiring a trial. Defendant’s interpretation is a more than plausible reading of the contract, and therefore plaintiff fails to satisfy its initial burden on summary judgment to show that its interpretation “is the only construction that can fairly be placed on it.” (Sullivan v Troser Mgt., Inc., 34 AD3d 1233, 1235 [4th Dept 2006]; Chimart Assoc. v Paul, 66 NY2d 570, 573 [1986].) In any event, defendant raises a triable issue whether the alleged check-kiting correspondence, defendant’s chart thereof, and in particular the nonaccrual forms, all items created by the bank, concerned the bank’s valuation of the loans such that they were exempted from eligibility for inclusion in the review files by the terms of the asset sale agreement, appendix A.


*438New York courts have consistently applied principles derived from the Federal mail fraud statute in construing the similar statutory language of our scheme to defraud statutes. (See, e.g., People v First Meridian Planning Corp., 86 NY2d 608 [1995] [the Court of Appeals stated that Federal case law interpreting the mail fraud statute is highly relevant in construing the scheme to defraud statute and applied Federal precedent to determine whether an investment scheme was a unitary scheme to defraud]; People v White, 101 AD2d 1037, 1039 [2d Dept 1984] [the Court held that the Federal mail fraud statute is highly relevant in evaluating what constitutes a scheme]; People v Kaminsky, 127 Misc 2d 497 [Sup Ct, NY County 1985, Rothwax, J.] [the court adopted Federal interpretations of the mail fraud statute in determining that the term “scheme” means “a plan and a pattern,” as opposed to isolated ad hoc acts, and to suggest that a scheme to defraud may be predicated upon a conscious disregard to the truth of representations made]; People v Lennon, 107 Misc 2d 329 [Broome County Ct 1980] [the court held that check <mask> schemes are cognizable under the scheme to defraud statute based in large part on the frequent prosecution of such offenses under the Federal mail fraud statute]; People v Block & Kleaver, 103 Misc 2d 758 [Monroe County Ct 1980] [the court relied on Federal mail fraud case law in determining that a scheme to defraud consists of a pattern of behavior calculated to deceive persons of ordinary prudence and comprehension; involves some connotation of planning and pattern; may affect different people over extended period; may use different means and representations; and that fraudulent intent may be inferred from all the facts and circumstances, from the modus operandi, from the dealings between the parties and from the losses sustained by the victims]; cft, People v Keyes, NYLJ, Sept. 5, 2000, at 27, col 2 [I refused to require a showing of intent to harm, as required by Federal case law interpreting the mail fraud statute, because actual injury is explicitly required under the New York statute].) While there is no question that Federal interpretations of the mail fraud statute are not binding on New York courts, the cases cited above recognize that Federal case law is highly pertinent to the construction of New York’s scheme to defraud statute. Accordingly, I regard the Cleveland decision (supra) to be highly relevant to the question of whether broker-dealer licenses are “property” for the purposes of the scheme to defraud statute.


Each year defendant gave a $20,000 bond with plaintiff as surety. Plaintiff made payments on the bonds covering the period July 1,1949 to July 1,1950; July 1, 1950 to July 1, 1951; July 1, 1951 to July 1, 1952 and July 1, 1952 to July 1, 1953. Defendant argues that there is no showing that the proper part of the total shortage of $27,113.53 was allocated to each bond. The annual shortages were computed as the amount due at the end of each year less the amount due at the end of the prior year. It is true that the amount of shortages during a year’s period had a wide variance because the one responsible therefor was robbing Peter to pay Paul and indulging in <mask>. Nevertheless, the method used in the segregation with respect to the annual bonds is logical and tenable. In any event, it does not appear that more than a $20,000 shortage appeared in one *576year or that plaintiff paid more than its $20,000 liability for that year.


At the same time, Water Tunnel Associates, a joint venture of Transit Mix and Certified Industries, had an account at Marine Midland Bank. A number of defendant Halloran’s other enterprises also had accounts at Marine Midland, and Halloran subscribed to "Marine Lines”, a computer hookup which permitted him instant access to all information about his accounts. Water Tunnel Associates had ceased active business operations in June 1982, and from at least January 1983, when the check-<mask> began, no checks from any source other than the Citibank Transit Mix account were deposited into the Marine Midland Water Tunnel account.


Nonetheless, the very fact that the defense arguments have some superficial viability shows a need for legislative attention to the modern problem of check-<mask>. When behavior looks, feels, smells, and sounds so thoroughly larcenous as does this elaborate, protracted and enormous scheme of check-kiting, there should be no need even to stop and reflect whether that behavior is indeed against the law.


The dissent also suggests that technological advances might develop a way to make methamphetamine manufacturing less dangerous to human life, invalidating the second degree felony-murder rule under Howard . Yet, there are many obsolete laws and legal maxims that fell by the wayside due to technological evolution. (See, e.g., Ruddell and Decker, Train Robbery: A Retrospective Look at an Obsolete Crime (2017) 42 Crim. Just. Rev. 333, 2 [check <mask> as a type of bank fraud less frequent today due to advances in electronic benefit transfers (EBT) and debit cards].) That still did not invalidate a conviction for the law violated at the time of commission. In the case of methamphetamine manufacturing, we could consider a method of production more prevalent today than at the time of petitioner's fatal fire, though not universal. The newer method is called "shake and bake" or "one pot" methamphetamine laboratories. "Generally, these laboratories are small-scale, easy to conceal, and produce two ounces or less of methamphetamine per batch. The ingredients, which are common household items (e.g. pseudoephedrine /ephedrine tablets, lithium batteries, camp fuel, starting fluid, cold packs, and drain cleaner), are mixed in a container, such as a plastic soda bottle. This provides a portable method of producing small amounts of methamphetamine. 'One-pot' laboratories are extremely dangerous , and , in many cases , cause fires , which can lead to injury and death ." (Drug Enforcement Admin., U.S. Dept. of Justice, 2017 National Drug Threat Assessment (Oct. 2017) pp. 74-75, italics added.) Thus, the ingredients remain hazardous: lithium scavenged from batteries, volatile liquids, and caustic lye, subject to fires and explosions when mixed. Absent actual evidence to the contrary, we do not see this particular technological "advance" as an improvement to the dangerousness to human life inherent in methamphetamine manufacturing.


Contrary to the People’s argument, it proves nothing that the Supreme Court in Williams stated, without the usual exhaustive listing of the law of the various jurisdictions, that bad checks are a subject "traditionally” regulated by State law. (458 US, at p 290.) While bad checks have long been with us, check-<mask> is a modern crime not specifically anticipated by traditional legislation. The People argue that People ex rel. Grillo v Holtzman (91 AD2d 983 [2d Dept], affd on opn below 58 NY2d 934 [1983]) is "dispositive” because the decision concludes that taking by check-kiting is larceny, but Grillo is also not helpful with the issue before this court. The Grillo opinion (supra) does not describe what kind of larceny was committed and, in any event, there are any number of factual and procedural differences between Grillo and this case.


These transactions are variously referred to as accommoda. *191tion checks, currency checks, check items and check <mask>, hut both plaintiff and defendant agree that these transactions between them from day to day were balanced and adjusted at once, sometimes by cash, sometimes by check, sometimes by both. See plaintiff’s testimony, fols. 96, 97, and defendant’s testimony, fols. 204, 259, 260, 261, 262 and 266. In addition to these temporary loans, if loans they can be called, and altogether outside them, plaintiff loaned defendant three specific sums of money, upon definite terms of credit, as follows: March 15, 1890 (fols. 5, 6 and 7), $464; March 5, 1890 (fols. 8 and 9), $800; June 24, 1890 (fol. 12), $20; total, $1,284. Upon account of these loans plantiff received payment of the amounts set forth in folios 13 to 15, on page 5, aggregating $756.75, leaving a balance of $527.25, for which suit was brought.


In this case there is no question whatever that each petitioner knowingly participated in a substantial and illegal bookmaking operation in New York State. In so doing, they spoke with large numbers of people. Each was prosecuted and convicted in this State for doing so. But there is no evidence that either “knew with whom he was dealing”, as did the petitioner in People ex rel. Grillo v Holtzman (91 AD2d 983, 984). Grillo was employed as a branch manager for a New York bank and one of the victims of his check-<mask> scheme was a Pennsylvania corporation. Here, however, was no legitimate business. Where the bookmakers or the bettors came from was as irrelevant to the betting as the location of the horse race or football game on which the bet was placed.


*904The checks, totaling over $9,000,000,000, were drawn and deposited in ever-increasing numbers, and in ever-increasing but varying amounts. This is characteristic of a "check-kite”, as a large number of transactions serves to delay discovery of the check-<mask> scheme. Thus, in January 1983, 57 checks were drawn on the Water Tunnel account; in March 1984, the number was 1,352. The number of deposits also increased in amount and each day’s deposits were made at a number of branches, which also made detection more difficult. For example, in March 1984, 464 deposits were made on 19 business days at varying branches and with different tellers. There was also a correspondence, on a daily basis, of the amounts drawn from one account and those deposited into the other.


Both on this motion and the prior one, defendant admits that it failed to provide a draft financial statement, dated August 31, 2005, which revealed that the value of collateral securing the two commercial loans in question, oak hardwood, had fallen by some $1.3 million due to adverse market pressures on that commodity over the previous nine months. After discovery, plaintiff establishes on this motion that defendant bank failed to disclose additional material facts pertaining to the loans in its possession: (1) information that CyTech wrote nearly $300,000 in worthless checks over a nine-day period in May 2005; (2) two “Non-Accrual Recommendation Forms” dated June 28, 2005, one for each of the two loans, in which defendant “move[d]” CyTech’s loans “to non-accrual status,” and in which the value of the collateral oak hardwood was “writt[en]-down” by more than $1.3 million, and which itself referred to CyTech’s “<mask> [oí] checks” in late May 2005; and (3) bank documents evidencing the bank’s investigation of the check-kiting problem, including an e-mail inquiry to CyTech on May 12, notes of a telephone conversation with a CyTech representative, and a chart prepared by the bank listing the nearly $300,000 in checks allegedly “kited” between May 2-10, 2005. Plaintiff contends that *353these documents should have been disclosed pursuant to the disclosure obligations of the asset sale agreement cited above.


Williams had engaged in a relatively small series of transactions "seemingly amounting] to a case of 'check <mask>.’ ” (458 US, at p 281.) The essence of the charges, however, was that the presentation of a single check amounted to a representation that the check was of a value equal to its face amount. (458 US, at p 283, n 3.) The Supreme Court concluded that the "course of conduct” of depositing "several checks” unsupported by sufficient funds did not involve the making of a " 'false statement’ ” because "technically speaking, a check is not a factual assertion at all, and therefore cannot be characterized as 'true’ or 'false.’ * * * Each check did not, in terms, make any representation as to the state of petitioner’s bank balance.” (458 US, at pp 284-285.)


Left for consideration is defendant’s motion to amend for the purpose of adding a claim for fraud in the inducement. The parties, both of them, wholly misconceive the reliance interest at issue on this motion. The persistent disclaimers of reliance on the review file documents would serve to preclude reliance on anything actually found in the review files. But these disclaimers, relied on by defendant, do not address the only cognizable reliance claim plaintiff could make in this case, and that is that plaintiff relied on defendant’s representation that all defined documents in defendant’s possession pertaining to the loans were in the review file. Assuming that the nonaccrual forms and alleged check-<mask> documents qualified for inclusion in the review files, as I must for purposes of this motion (the August 31 draft financial statement has already been found to qualify for inclusion), plaintiff nevertheless fails to point to any duty independent of the contract documents themselves as a basis for its amended claim. (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 389 [1987].) While it is true that, under CBS Inc. v Ziff-Davis Publ. Co. (supra), reliance is not an element of plaintiffs breach of contract/warranty claim, the added fact of reliance, if present, cannot support plaintiffs proposed fraud-in-the-inducement claim without reference to such an independent duty.