The Real Deal New York

Judge throws out DelShah’s $4M securities fraud lawsuit over Setai Wall Street conversion

May 30, 2013 08:30AM

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Michael Shah and Setai Wall Street

Michael Shah and Setai Wall Street

A New York federal judge threw out a securities fraud suit on Tuesday brought by Michael Shah’s DelShah Capital against Zamir Equities that arose out of a commercial-to-residential condominium conversion at Setai Wall Street, Law360 reported.

U.S. District Judge Katherine Forrest found that Zamir hadn’t misrepresented the project ,at 40 Broad Street, and that DelShah’s $4 million investment stemmed from its own mistakes. Forrest added that the testimonies given by witnesses including Michael Shah came off as “contrived.”

The decision follows a lengthy litigation period and a bench trial that spanned several months, according to court documents seen by Law360. DelShah had claimed that Zamir misled it about the project’s progress and cost, and that an executive at Zamir had sold DelShah all of its interest in the project because it knew it was heading for trouble.

“The securities laws are not an insurance policy for investments gone wrong, inexperience, bad luck, poor choices or unexpected market events,” the order states. “The court is left with the firm conviction that plaintiff Delshah Group LLC seeks just that — an insurance policy. Indeed, after years of discovery, plaintiffs’ case fails at every level.”

Zamir’s attorney Philip Byler told Law360 following the decision that DelShah had failed to make its case. Representatives from DelShah did not immediately respond to Law360’s requests for comment. [Law360]  – Hiten Samtani

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