Lowis & Gellen attorneys Gerald Haberkorn, Kevin Clancy and Joan Kubalanza recently represented IFX Markets, Ltd., a London based foreign currency trading firm, in defense of a RICO lawsuit filed by former investors in the District of Columbia. The plaintiffs alleged that a former independent contractor of IFX solicited over $5 million in investments in D.C. by fraudulent means and that they ultimately lost the entire amount. They sued IFX directly in the D.C. federal District Court alleging substantive RICO violations and RICO conspiracy, seeking treble damages under RICO of at least $15 million. IFX general counsel, Cary Depel, turned to Lowis & Gellen, which maintains an office in London, to defend the lawsuit. Lowis & Gellen filed a 45-page motion to dismiss the lawsuit for lack of personal jurisdiction against the UK company, and also for failure to state a viable cause of action under RICO. The plaintiffs filed a motion seeking leave to obtain discovery on the jurisdictional issues, which would have imposed tremendous costs on IFX and delays in the proceedings. Lowis & Gellen successfully defeated that motion, arguing that pleadings alone were sufficient to illustrate the lack of jurisdiction against IFX, a foreign entity with no offices in D.C. Ultimately, the District Court issued a 20-page opinion dismissing the case with prejudice based on the lack of personal jurisdiction, and fully adopting the arguments presented by Lowis & Gellen.
After hearing news of the victory, Mr. Depel reported the news to his management saying: “This case had potential $15m exposure. I cannot tell you how pleased I am – this case could have gone to trial and yet we were dismissed out at the pleadings stage! Lowis & Gellen has been worth every penny.” Mr. Depel said that he knew that it is a difficult task to get such a significant case dismissed outright at the pleading stage “but I had confidence in Lowis & Gellen all along.”
