NewEdge Securities secures partial dismissal of putative consumer class action challenging administration of cash sweep program
Client(s) NewEdge Capital Group LLC
On behalf of NewEdge Securities, LLC, Jones Day secured partial dismissal of a putative consumer class action challenging the interest rates paid on uninvested cash in customers' brokerage and retirement accounts. U.S. District Court Judge Cathy Bissoon dismissed three of the plaintiff's eight claims and dismissed two affiliated entities from the case entirely.
The court dismissed the breach of fiduciary duty claim, agreeing that the plaintiff failed to identify any breach falling within the limited agency relationship created for brokerage customers and rejecting the theory that Regulation Best Interest creates a broader fiduciary duty with respect to sweep accounts. The court also dismissed the negligence claim as barred by Pennsylvania's gist of the action doctrine, recognizing that the duties at issue arose solely from the parties' contractual relationship. And the court dismissed the negligent misrepresentation claim, finding that the challenged statements about the sweep program's operation were forward-looking rather than representations of present fact.
The court further dismissed affiliates EdgeCo Holdings, L.P. and NewEdge Capital Group, LLC from the case, agreeing that the plaintiff failed to plead any non-conclusory allegations tying either entity to the alleged conduct and finding no basis to disregard the entities' corporate separateness.
Witchko v. EdgeCo Holdings, L.P., NewEdge Capital Group, LLC, NewEdge Securities, Inc., and NewEdge Securities, LLC, No. 2:25-cv-00781 (W.D. Pa.)
