Victims of trading scheme face opposition to class action complaint

About two months after the victims of launched a lawsuit against numerous entities involved in the scheme, some of the defendants have responded to the allegations.

On December 8, 2021, Defendants ePayments Systems Ltd. (EPS), Andrei Fetin, and Mikhail Rymanov filed their motion to dismiss the complaint. The defendants name two main reasons ffor why the complaint should be nixed: failure to state a claim and lack of personal jurisdiction.

Let’s recall that the plaintiffs have brought this putative class action against 60 different defendants based on a purported “massive international scheme to defraud Plaintiffs and similarly situated investors by soliciting them to deposit money or cash equivalents with ROFX, a ‘robotically operated foreign exchange trading’ platform that purportedly utilized algorithms to trade on behalf of investors.”

The plaintiffs assert six causes of action arising from that allegedly fraudulent “scheme”: Fraud (Count I); Unjust Enrichment (Count II); RICO enterprise under 18 U.S.C. § 1962(c) (Count III); RICO conspiracy under 18 U.S.C. § 1962(d) (Count IV); Request for Temporary Injunction (Count V); and Conspiracy (Count VI).

The EPS defendants argue that, while ambitious in scope, “the plaintiffs’ bare-bones Complaint is light on factual allegations, falling woefully short of the federal pleading standards”.

The defendants argue that the Complaint is a prototypical “shotgun” pleading where each count impermissibly adopts the allegations of all preceding counts and lumps all defendants together, without specifying which defendant is purportedly responsible for what conduct.

The defendants also say that the Complaint lacks any jurisdictional allegations whatsoever, much less allegations suffice to adequately plead personal jurisdiction against any of the EPS Defendants, all of which are nonresidents.

Mr. Fetin and Mr. Rymanov are both citizens of the United Kingdom. Plaintiffs allege “upon information and belief,” that both Fetin and Rymanov are or were directors of EPS “during the relevant period,” but the Complaint does not include a single factual allegation regarding any conduct or statements by Mr. Fetin or Mr. Rymanov. The Complaint also is devoid of any factual allegations that Mr. Fetin and Mr. Rymanov have any jurisdictional contacts with Florida.

Finally, the defendants argue that the plaintiffs make no attempt to satisfy the heightened pleadings standards of Federal Rule of Civil Procedure 9(b) for any claim—particularly as to any of the EPS Defendants—and thus fail to state any cognizable cause of action.

EPS “is a private limited company with a registered office address at 33 Cavendish Square, London, England, W1G OPW.” The plaintiffs allege only that EPS “is an entity into which ROFX investor funds were deposited,” and the Complaint does not include a single factual allegation regarding any conduct or statement by EPS. Nor does the Complaint plead any facts establishing that EPS has any jurisdictional contacts with Florida, let alone contacts sufficient to establish due process.

Therefore, the EPS defendants urge the Court to dismiss the Complaint in its entirety.

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