Justia Arkansas Supreme Court Opinion Summaries

Articles Posted in Securities Law

The Arkansas Securities Commissioner filed a civil regulatory action against three individuals (collectively, Appellees), alleging that Appellees engaged in the sale of unregistered securities - in the form of notes for real estate loans with a fixed rate of interest - and offering and selling securities despite not being licensed as brokers or agents in violation of the Arkansas Securities Act. The circuit court granted summary judgment in favor of Appellees, concluding that the notes at issue were not securities based on the test announced by the Arkansas Court of Appeals in Smith v. State. The Supreme Court reversed, holding that while the Smith test is instructive, the all-inclusive nature of the test set forth by the Supreme Court in Schultz v. Rector-Phillips-Morse, Inc. is better suited to the purposes of the Act. Remanded. View "Waters v. Millsap" on Justia Law

Posted in: Securities Law

Developers purchased forty acres with the intent to develop it. Appellants secured a mortgage on the property with a bank. Later Developers formed a municipal property owners' district (the District). Law Firm was retained by the District as legal counsel for the proposed issuance of improvement bonds to finance public improvements in the development. At issue in this case were certain bonds issued by the District that were sold to several banks (Appellants). Developer defaulted on payment of the capital improvement use fees on the bonds and subsequently defaulted on the original mortgage, and the property was sold. Appellants sued Law Firm, alleging that Law Firm had a duty to inform Appellants of the mortgage on the real property and that it failed to inform them. The circuit court granted summary judgment for Law Firm. The Supreme Court affirmed in part and reversed and remanded in part, holding that the circuit court (1) correctly found Law Firm was not liable under the Arkansas Security Act; (2) erred in granting judgment on the issue of attorney malpractice; and (3) correctly found Law Firm had no duty to Appellants under contract, negligence, or breach of a fiduciary duty. View "First Ark. Bank & Trust v. Gill Elrod Ragon Owen & Sherman, P.A." on Justia Law