![]() A detailed description of Continental Coin's operations is described in Jenson v. ![]() At the time of the audit, less than 1% of Continental Coin's customer obligations were secured by physical bags of coins in Continental Coin's possession. ![]() The testimony was that Continental Coin was in a complete "hedge" at all times and thereby was protected from any exposure to risk of market fluctuations. The futures contracts were themselves purchased on margin and in Continental Coin's name, without identification or connection to any particular customer. These purchases would be made daily to reflect aggregate net sales for the day. Rather than purchasing silver coins, Continental Coin secured its obligations to customers primarily by making purchases in the futures market parallel to and offsetting its customers' margin purchases. In 1973, at the time of the audit, 80 to 90% of Continental Coin's business was margin business. A customer could, however, close out the purchase and realize any appreciation in value without taking physical delivery of the coins. If a margin purchase, Continental Coin would loan the customer the purchase price balance and was obliged to deliver the coins to the customer on payment of the margin debt, but not before. The customer could pay cash and take physical possession of the coins or could buy on margin, paying down only a portion of the purchase price. Plaintiffs then brought on for trial this state court action against defendant-respondent Touche Ross & Co., which had conducted an audit of Continental Coin.Ĭontinental Coin (the sales division of Continental Financial Corporation) was in the business of selling silver coins in bulk as investments. Plaintiffs were successful in making a partial recovery in a separate federal court action against Continental Coin and its principals, which eventually went bankrupt. We affirm.Īppellant-plaintiff class members are customers of Continental Coin Exchange, Inc., who claim to have suffered financial loss as a result of their purchases of bulk silver coins on margin from Continental Coin. Plaintiffs appeal from a denial of their motion for judgment notwithstanding the verdict or a new trial. Based on the jury's special verdict answers, the trial court ordered judgment of no liability in favor of the defendant. Another issue is whether the trial court erred in denying a pretrial motion to disqualify defendant's counsel from representing the defendant because of an alleged conflict of interest. This class action arises out of an audit prepared by the defendant accounting firm, *723 and raises issues on evidentiary rulings relating to the claim of negligence against the defendant auditor and whether the defendant violated the state consumer fraud, the state false advertising, or the state securities statutes. Heard, considered and decided by the court en banc. Oppenheimer, Wolff, Foster, Shepard & Donnelly, Craig W. TOUCHE ROSS & CO., defendant and third party plaintiff, Respondent, andĬONTINENTAL FINANCIAL CORPORATION, et al., Third Party Defendants.
0 Comments
Leave a Reply. |