United States District Court, S.D. California
ALBERT CALDERON, an individual on behalf of himself and all others similarly situated, et al., Plaintiffs,
TOTAL WEALTH MANAGEMENT, INC. et. al, Defendants.
ORDER GRANTING DEFENDANT JED COOPER'S MOTION TO
KOGER T. BENITEZ, UNITED STATES DISTRICT JUDGE.
the Court is Defendant Jed Cooper's Motion to Dismiss
Plaintiff's Third Amended Complaint. (Docket No. 122.)
The motion is fully briefed. For the reasons that follow,
Defendant's motion is GRANTED, and the
Plaintiff's claims against Defendant are
allege that investors were solicited to invest in Total
Wealth Management (“TWM”) and its affiliated
companies, Altus Capital Opportunity Fund, LLC
(“ACOF”) and Altus Capital Portfolio Series
(“ACPS”), primarily through a weekly radio
program, financial awareness seminars, and community
engagement. Investors were allegedly misled into believing
their funds were being safely invested based on investment
portfolio risk when in fact, investments were being channeled
primarily to Private Placement Capital Notes LLC II
(“PPCN”), LJL Secured High Yield Income Fund I,
LLC (“LJL”), and Aegis Retail Group LLC
(“AEGIS”) in exchange for fees paid by the
entities, without disclosure to investors.
allegedly under the control or direction of the following
defendants by virtue of their ownership or positions as
officers: Jacob Cooper,  co-founder and majority owner of TWM;
Nathan McNamee (“McNamee”), TWM's president
and chief compliance officer for relevant periods; and David
Shoemaker (“Shoemaker”), co-founder and former
chief compliance officer. Plaintiffs assert that at all
relevant times Defendant Jed Cooper was a TWM Associate
Planner and Client Services Manager, and served as some of
the Plaintiffs' contact at TWM.
procedural history of this case is well known to the parties
and detailed in the Court's January 19, 2017
Order granting dismissal of other defendants from this
action and October 11, 2017 Order denying the
Plaintiffs' request for entry of default judgment,
denying Cooper's motion to dismiss for want of
prosecution, and denying the parties' joint motion to
stay the action, which the Court incorporates by reference
herein. (See Docket No. 81 at pp. 2-3; Docket No.
118 at pp. 2-3.)
operative Third Amended Complaint (“TAC”) alleges
five claims for relief against Cooper: (1) control of party
making fraudulent sale of securities in violation of
California Corporations Code §§ 25501, 25504; (2)
fraudulent sale of securities in violation of § 25504.1;
(3) suppression of material fact in violation of California
Civil Code § 1710; (4) aiding and abetting suppression
of material fact; (5) aiding and abetting breach of fiduciary
duty. Cooper now moves for dismissal of all claims against
him pursuant to Federal Rule of Civil Procedure 12(b)(6).
complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 677-78
(2009). “A claim is facially plausible ‘when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.'” Zixiang Li v.
Kerry, 710 F.3d 995, 999 (9th Cir. 2013) (quoting
Iqbal, 556 U.S. at 678).
considering a Rule 12(b)(6) motion the court must
“accept as true facts alleged and draw inferences from
them in the light most favorable to the plaintiff.”
Stacy v. Rederite Otto Danielsen, 609 F.3d 1033,
1035 (9th Cir. 2010) (citing Barker v. Riverside Cnty.
Office of Educ., 584 F.3d 821, 824 (9th Cir. 2009)). On
the other hand, bare, conclusory allegations, including legal
allegations couched as factual, are not entitled to be
assumed to be true. Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007). “[T]he tenet that a court
must accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions.”
Iqbal, 556 U.S. at 678. “While legal
conclusions can provide the framework of a complaint, they
must be supported by factual allegations.” Id.
of fraud must be stated with particularity. Fed.R.Civ.P.
9(b). “In order to plead fraud with particularity, the
complaint must allege the time, place, and content of the
fraudulent representation; conclusory allegations, do not
suffice.” Shroyer v. New Cingular Wireless Serv.,
Inc., 622 F.3d 1035, 1042 (9th Cir. 2010) (citing
Moore v. Kayport Package Express, Inc., 885 F.2d
531, 540 (9th Cir. 1989)); Kearns v. Ford Motor Co.,
567 F.3d 1120, 1124 (9th Cir. 2009) (requiring plaintiffs
plead who, what, when, where, and how). “Rule 9(b) does
not allow a complaint to merely lump multiple defendants
together, but ‘requires plaintiffs to differentiate
their allegations when suing more than one defendant . . .
and to inform each defendant separately of the allegations
surrounding his alleged participation in the fraud.”
Swartz v. KPMG LLP, 476 F.3d 759, 765 (9th Cir.
2007) (quoting Haskin v. R.J. Reynolds Tobacco Co.,
995 F.Supp. 1437, 1439 (M.D. Fla. 1998)). “[G]eneral
allegations that the ‘defendants' engaged in
fraudulent conduct” with only specific allegations as
to some, “patently fail[s] to comply with Rule
9(b).” Id. at 765.
Cooper's Motion to Dismiss
argues that each of Plaintiffs' claims against him are
subject to the heightened pleading standards of Federal Rule
of Civil Procedure 9(b), and that dismissal is appropriate
due to the TAC's dearth of specific factual allegations
to support each of the claims against him. The Court agrees.
Control of Party Making Fraudulent Sale of Securities