Borsellino v. Goldman Sachs Group

Lewis Borsellino was a one-third partner in Chicago Trading and Arbitrage ("CTA"), a company that facilitated stock trading through remote access to the electronic stock exchange NASDAQ. His partners, whom he accused of acting behind his back and improperly using CTA resources, developed a technology to allow remote trading to occur without having to visit CTAs offsite trading location. They started a new business called Archipelago using this technology, and Goldman Sachs became a 25% owner. Archipelago was enormously successful. Borsellino sued Goldman Sachs, contending that it colluded with his former partners in CTA to defraud him of his rightful interest in the new venture. The district court dismissed the complaint under Federal Rule of Civil Procedure 9(b), which contains heightened pleading requirements for fraud, and the plaintiffs now challenge that decision. Because the complaint does not adequately allege with any specificity a fraud or other misbehavior on the part of Goldman Sachs, we affirm the judgment of the district court.