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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
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`TALIPOT ESG INVESTMENTS LLC and
`TIERRA PE LLC,
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` Plaintiffs,
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` -against-
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`BULLTICK FINANCIAL ADVISORY
`SERVICES LLC, HECTOR VILLAESCUSA,
`JAVIER MARTIN RIVA, ADOLFO DEL
`CUETO, AITHRE CAPITAL
`MANAGEMENT LLC and JAMIL SWATI,
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` Defendants.
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`JAMIL SWATI’S MEMORANDUM OF LAW IN SUPPORT OF
`MOTION TO DISMISS AMENDED COMPLAINT
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`Jamil Swati, by and through his undersigned attorneys, respectfully submits this
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`memorandum of law in support of his Motion to Dismiss the May 20, 2024 Amended Complaint
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`(“Amended Complaint”) filed by Talipot ESG Investments LLC (“Talipot”) and Tierra PE LLC
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`(“Tierra”) (collectively “Plaintiffs”). Mr. Swati moves to dismiss the three causes of action
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`asserted against him, for common law fraud, aiding and abetting common law fraud, and breach
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`of fiduciary duty, pursuant to CPLR 3211(a)(7) for failure to state a claim.
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`PRELIMINARY STATEMENT
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`Plaintiffs Talipot and Tierra are private investment vehicles that invested a combined $20
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`million in Theia International Group LLC (“Theia”) in the hopes of profiting from a
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`revolutionary satellite technology that Theia was developing. The investments failed, and
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`Plaintiffs have now sued six different entities and individuals – but not Theia or the two
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`executives who ran Theia and allegedly convinced Plaintiffs to invest – in an effort to get their
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`money back.
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`The thrust of the Amended Complaint is that Plaintiffs made their investments based in
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`part on misrepresentations about Theia’s financial situation that they received from Theia’s
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`placement agent, Bulltick Financial Advisory Services (“Bulltick”), though its representatives
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`Hector Villaescusa, Javier Martin Riva, and Adolfo del Cueto; and from Theia’s CEO and COO,
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`Stephen O’Neil and Erlend Olson, who have not been sued. During the time period relevant to
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`the Amended Complaint, Mr. Swati held the title of Head of Strategic Investments at Theia, and
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`he also co-managed a special purpose vehicle called Aithre Capital Partners LLC that was
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`designed to pool investor funds in order to invest in convertible notes to be issued by Theia. In
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`Plaintiffs’ original Complaint in this case, filed on January 3, 2024, essentially the only concrete
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`allegation they made as to Mr. Swati was that his dual role at Theia and Aithre had not been
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`disclosed to them. But in fact, it had, and Plaintiffs no longer allege otherwise.
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`The Amended Complaint fails to state a claim against Mr. Swati. The original version of
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`the Complaint barely mentioned him in its description of how Plaintiffs came to make their
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`investments. In an effort to salvage a case against him, in this round of pleadings, Plaintiffs
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`place him at a tiny handful of meetings and ascribe to him a role in preparing investor
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`presentations, largely on information and belief. These new efforts to patch together a fraud
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`claim against Mr. Swati fall well short of the heightened pleading standard.
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`The pleadings are silent as to what Mr. Swati said at any given meeting that was
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`misleading (or what he said at all); what parts of any presentations he actually prepared or edited
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`– and crucially, whether the parts he prepared or edited were the parts that Plaintiffs now allege
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`to be misleading; and how, if at all, Mr. Swati was made aware that anything that was said to
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`Plaintiffs in his presence was false. Although Plaintiffs sprinkle Mr. Swati’s name into the
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`Amended Complaint more times than in the original Complaint (when his number of mentions
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`was close to zero), the difference is ultimately cosmetic. They do not allege with particularity
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`what he did that was fraudulent or what he knew when he did it.
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`Also new to the Amended Complaint is the inclusion of Mr. Swati in Plaintiffs’ cause of
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`action for breach of fiduciary duty and the imposition of a constructive trust. This claim, which,
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`like common law fraud, must be pleaded with particularity, fails as to Mr. Swati. Plaintiffs do
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`not sufficiently plead the existence of a fiduciary duty running to them from Mr. Swati; nor do
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`they sufficiently plead facts showing that he breached any such duty.
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` The paucity of allegations against Mr. Swati in the Amended Complaint reflects – again
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`– the reality that he does not belong in this lawsuit. He was not one of the people who allegedly
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`persuaded Plaintiffs to make their investments, and he neither defrauded anyone nor breached
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`any duties that he owed. He is an afterthought in the Amended Complaint, and the claims
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`against him must be dismissed.
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`FACTUAL BACKGROUND RELEVANT TO MR. SWATI’S MOTION TO DISMISS
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`Talipot is a private investment company that manages investments for members of a
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`certain family in Mexico. Amended Complaint ¶ 53.1 Tierra is an investment vehicle that is
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`managed by Grupo Koval (“Koval”), which in turn is a private investment company that
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`manages investments for members of a certain family in Mexico. ¶ 53.
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`Theia is a limited liability company that in May 2019 secured a license from the Federal
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`Communications Commission to build a network of 112 satellites capable of providing real-time,
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`in-depth imaging of the Earth’s surface (the “Spectrum License”). ¶ 44. This license required
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`Theia to launch 56 of the satellites by May 9, 2024. The technology that Theia was developing
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`represented a potentially revolutionary breakthrough. ¶ 45. The Amended Complaint does not
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`specify the individuals at Theia who developed the technology or had knowledge of its progress.
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`In June 2020, as alleged, Theia engaged Bulltick as its placement agent for soliciting
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`investors. ¶ 50. Later in June, Theia entered into a Secured Note Purchase and Security
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`Agreement with FCS Advisors LLC d/b/a Brevet Capital Advisors (“FCS/Brevet”), which
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`refinanced certain debt Theia previously owed to FCS/Brevet by the issuance of two separate
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`$100 million promissory notes; one due on December 29, 2020 and the other due on June 29,
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`1 Unless specifically stated otherwise, ¶ shall refer to a paragraph of the Amended Complaint.
`The truth of the allegations stated in the Amended Complaint is assumed for the limited purposes
`of this motion.
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`2021. ¶ 51. The Amended Complaint does not allege that Mr. Swati ever provided instruction
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`or direction to Bulltick as to what to say to potential investors.
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`On October 5, 2020, Bulltick formed Aithre Capital Partners (“ACP”), a special purpose
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`vehicle designed to pool investor funds in order to invest in convertible notes to be issued by
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`Theia. ¶ 52. Aithre Capital Management (“ACM”) was the managing member of ACP. Mr.
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`Swati (through an entity controlled by him), and an entity called Domus LLLP, a family trust
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`whose beneficiaries are immediate family members of a Mexican national named Gonzalo Gil
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`White, were equal partners in ACM (¶¶ 26, 38), and Mr. Swati managed ACM (¶ 40). Mr. Swati
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`also served as a Theia executive. ¶ 164.
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`Later in October 2020, a partner at Bulltick, Hector Villaescusa, approached
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`representatives of Talipot and Koval about potentially investing in Theia as part of a capital
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`raise, a series of communications in which Mr. Swati is not alleged to have played any part. ¶
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`61. Mr. Villaescusa told Talipot and Koval that investments were to be made in Aithre, and
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`Aithre would invest the pooled funds in Theia convertible notes with a 24-month maturity and
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`with an option to convert into equity at a 90% discount. ¶ 63. Mr. Villaescusa told them that the
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`investments had to be made quickly due to intense interest and competition among investors to
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`participate in the capital raise, which he anticipated would be fully subscribed. ¶ 64. He said
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`that the purpose of the Aithre investment was to provide bridge financing for operational costs to
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`Theia until several billion dollars in additional funding became available to Theia through a
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`partnership program involving government entities. ¶ 65. He told Talipot and Koval that this
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`larger commitment was already in place, but was reserved for major operations that Theia was
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`not ready to commence. ¶ 65. Plaintiffs do not allege that Mr. Swati knew that Mr. Villaescusa
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`was making any of the above representations to Talipot and Koval, or that Mr. Swati knew that
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`such representations would have been misleading. See ¶¶ 61-67.
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`Talipot ultimately invested $15 million in Theia. The primary individuals who are
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`alleged to have pitched the investment to Talipot are Mr. Villaescusa, Mr. Martin, and Mr. del
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`Cueto, all of whom worked at Bulltick. The Amended Complaint also alleges that the
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`individuals who ran Theia – its CEO, Stephen O’Neill, and its COO, Erlend Olson – met with
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`Talipot on November 9, 2020 and misrepresented to Talipot what Theia’s plan was for using
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`Talipot’s investment. ¶¶ 77-78. There is no allegation that Mr. Swati was present for these
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`discussions or even that he heard about them later. Notwithstanding Plaintiffs’ allegations that
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`Mr. O’Neill and Mr. Olson were the individuals at Theia who made misrepresentations to them;
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`that they ran Theia as its CEO and COO; and that there is no ostensible bar to suing them as
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`there appears to be for suing Theia itself, Plaintiffs have brought no claims against them.
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`On November 23, 2020, as alleged, Mr. Martin (from Bulltick) sent Talipot a draft term
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`sheet, prepared by Bulltick’s counsel, for ACPs’ purchase of convertible notes issued by Theia
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`and collateralized with a security interest in the Spectrum license. ¶ 85. Bulltick had previously
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`sent Talipot a document estimating the value of the Spectrum License to be between $6.55
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`billion and $10 billion. ¶ 81. On December 4, 2020, Mr. Swati sent to Talipot a link to a
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`document titled “201204 Theia Investor Presentation. ¶ 88. As newly alleged in the Amended
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`Complaint, on information and belief, Mr. Swati prepared and edited this document, and knew
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`that it contained substantial falsehoods. ¶ 88. What those falsehoods were, and which of them
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`Mr. Swati knew about (and how), are unalleged. There are no facts pleaded as to what content, if
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`any, Mr. Swati prepared or edited.
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`Also according to the Amended Complaint, on December 10, 2020, Mr. Swati sent to
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`Talipot another document titled “TGI Management Presentation 201204” which he “and other
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`members of the Theia management team” then reviewed with Talipot on a video conference call.
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`¶ 89. According to the Amended Complaint, the presentation included a fake capitalization table
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`and contained the following statements that were not accurate: major contractor agreements were
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`complete, and all the funding required to build and launch the satellite system was on process to
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`closing. ¶ 89. Plaintiffs do not allege what it is Mr. Swati allegedly said on the call; what his
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`role on the call was; or what content within the presentation he had any role in preparing.
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`On December 13, 2020, Bulltick sent Talipot the ACP membership subscription
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`documents. ¶¶ 92. On December 15, 2020, Theia and Brevet agreed to restructure the short-
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`term debt facility to extend the maturity date of the First Brevet Note to June 29, 2021, to match
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`the maturity date of the Second Brevet Note. ¶ 97. This was not disclosed to Talipot. ¶ 98.
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`Plaintiffs do not allege that Mr. Swati had any role in the restructuring of this debt facility, or
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`that he was aware of what Theia or Bulltick had or had not disclosed to Plaintiffs about the debt
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`facility. Nor do Plaintiffs allege that Mr. Swati played any role in estimating the value of the
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`Spectrum license.
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`On December 18, 2020, Talipot executed a soft commitment letter with Bulltick for an
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`investment in Theia. ¶ 99. On December 28, 2020, Talipot received from Bulltick and ACP a
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`copy of the Secured Note Purchase Agreement to be entered into between Theia and ACP. ¶
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`100. For purposes of the Agreement, Theia and ACP set the value of the Spectrum license at
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`$2.67 billion. ¶ 100. Under the Secured Note Purchase Agreement, as alleged, the convertible
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`notes to be issued by Theia to ACP were to be secured both by 100% of the common stock of
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`Theia and the value of the Spectrum License that Theia held. ¶ 101. Thus, by virtue of its
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`investment in Aithre, Talipot would receive an indirect interest in both the equity of Theia and
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`the Spectrum License. ¶ 101. Plaintiffs do not allege that Mr. Swati negotiated the soft
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`commitment letter with Talipot; that he participated in the valuation of the Spectrum license; or
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`that there was any aspect of these documents or valuations that he believed to be false.
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`On January 5, 2021, Talipot signed the subscription agreement for its $15 million
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`investment. Talipot fully funded its investment on January 6, 2021. ¶¶ 103-04. The Amended
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`Complaint goes on to discuss a time period after Talipot had already agreed to, and fully funded,
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`its investment – i.e., a time period after Plaintiffs had already invested their money. These
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`allegations consist primarily of communications that Bulltick had with Plaintiffs about
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`monitoring Plaintiffs’ investments and about other potential investment opportunities. ¶¶ 130-
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`34. In the original Complaint, Mr. Swati was not mentioned in these discussions. Now, “on
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`information and belief,” Plaintiffs allege that Mr. Swati was present for one such discussion, on
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`February 12, 2021, to help convince Talipot (in a manner left to the imagination) that “all was
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`well with Theia.” ¶ 134. The Amended Complaint further alleges that on July 6, 2021, Mr.
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`Swati participated in a meeting with Bulltick, “Theia’s executive management team,” and
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`Talipot in which “Bulltick and Theia” unsuccessfully pitched Talipot on making an additional
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`investment. ¶ 142. Mr. Swati is not alleged to have said anything during this meeting or to have
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`actually participated in any way. Plaintiffs do not allege that they made any investments based
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`on this meeting.
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`With respect to Tierra, Plaintiffs allege that Bulltick, through Mr. Martin and Mr.
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`Villaescusa, reached out to Tierra and had a series of communications with Tierra about the
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`appeal of Theia’s technology, interest shown by other investors, and other factors that made the
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`investment attractive, certain of which Plaintiffs allege were false or misleading. ¶¶ 105-09,
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`102-20. Mr. Swati is not alleged to have been involved in any of these communications or to
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`have known which of them, if any of them, would have been false. Plaintiffs further allege that
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`on November 17, 2020, “Theia’s management team” walked Tierra through a PowerPoint with
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`information about Theia’s technology, capitalization table, business model, and projected
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`valuation. ¶ 111. Plaintiffs do not allege that Mr. Swati was present for this meeting, that he
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`knew about, or that he prepared any of the materials for it.
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`According to the Amended Complaint, on December 18, 2020, Mr. Swati sent a
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`document called “TGI Management Presentation 201204” to Tierra. ¶ 123. The Amended
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`Complaint alleges that Mr. Swati prepared and edited this document and knew it to contain
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`substantial falsehoods. ¶ 124. Plaintiffs do not allege what falsehoods Mr. Swati knew about,
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`or what parts of the document Mr. Swati prepared or edited. Also on December 18, 2020, Tierra
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`made a soft commitment to make a $5 million investment in Theia. ¶ 125.
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`On December 21, 2020, Mr. Swati organized a Microsoft Teams meeting among Koval,
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`Bulltick, and Theia. ¶ 126. In their original Complaint, Plaintiffs did not allege that Swati
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`participated in this meeting. Now, “on information and belief,” they do. However, they say
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`nothing about the meeting itself let alone Mr. Swati’s alleged participation in it, other than he
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`participated “on behalf of Theia.”
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`On January 4, 2021, Tierra signed the subscription agreement for a $5 million investment
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`in Theia. ¶ 128. On January 7, 2021, Tierra funded the investment. ¶ 129.
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`On April 19, 2021, over four months after Tierra made its investment, Brevet delivered a
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`Notice of Default to Theia. ¶ 136. Plaintiffs were not told about this Notice of Default. ¶ 136.
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`On June 29, 2021, Theia defaulted on the First and Second Brevet Notes. ¶ 140. Plaintiffs make
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`no allegations about Mr. Swati with respect to either of these Notices of Default; and in any
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`event, they also do not allege that learning of them in April and June of 2021 would have
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`allowed them to avoid their investment losses.
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`On August 19, 2021, FCS/Brevet commenced an action against Theia in the United
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`States District Court for the Southern District of New York seeking the appointment of a
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`receiver. ¶ 148. Theia was placed into receivership on November 8, 2021. ¶ 150. As alleged,
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`Bulltick made representations to Plaintiffs – in which Mr. Swati is not alleged to have played any
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`part and of which he is not alleged to have had knowledge – about Plaintiffs being able to recoup
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`their investments once a receiver was appointed and was able to find a buyer for the licenses. ¶
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`151. This turned out to be incorrect, as on October 23, 2023, the District Court approved a
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`motion by the receiver to sell Theia’s assets for only $40 million. ¶ 155.
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`STATUTORY ALLEGATIONS AND PROCEDURAL HISTORY
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`On January 3, 2024, Plaintiffs filed the original Complaint in this case. The Complaint
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`alleged four causes of action: (1) common law fraud, (2) aiding and abetting common law fraud,
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`(3) unjust enrichment, and (4) breach of fiduciary duty and the imposition of a constructive trust.
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`Mr. Swati was named only in the first two causes of action.
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`On March 13, 2024, Mr. Swati moved to dismiss both causes of action against him for
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`failure to state a claim. Plaintiffs did not oppose Mr. Swati’s motion to dismiss, but instead filed
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`an Amended Complaint. The Amended Complaint again includes Mr. Swati in the causes of
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`action for common law fraud and aiding and abetting the same, but also includes him for the first
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`time in the cause of action for breach of fiduciary duty and the imposition of a constructive trust.
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`In the first cause of action, for common law fraud, Plaintiffs set forth specific statutory
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`allegations with respect to Bulltick, Mr. del Cueto, Mr. Martin, and Mr. Villaescusa. ¶¶ 158-59.
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`Despite naming Mr. Swati in the first cause of action, and including a heading within the cause
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`of action that reads “Allegations with respect to Theia and Swati/Aithre Capital Management,”
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`Plaintiffs do not assert a single fact about Mr. Swati in the statutory allegations. ¶¶ 158-59.
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`Indeed, there are specific facts asserted against Mr. Olsen and Mr. O’Neil – who have not even
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`been sued – but none against Mr. Swati. ¶158.
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` In the statutory allegations set forth under the second cause of action, for aiding and
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`abetting common law fraud, Plaintiffs simply allege that Mr. Swati “substantially assisted
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`Theia’s fraud by preparing and disseminating the Theia presentations containing false statements
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`to Talipot and Koval.” ¶ 150.
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`In the statutory allegations to support the claim of breach of fiduciary duty and the
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`imposition of a constructive trust, Plaintiffs assert that as a part owner of ACM, Mr. Swati owed
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`Plaintiffs fiduciary duties; that he promised Talipot and Tierra that the $20 million they invested
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`would be used as set forth in Theia’s written “use of proceeds,” and that he knew this would not
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`be the case.
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`A. Applicable Law
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`ARGUMENT
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`A party may move for judgment dismissing one or more causes of action asserted against
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`him on the ground that the pleading fails to state a cause of action. New York Civil Practice Law
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`and Rules (“CPLR”) 3211(a)(7). In evaluating a motion to dismiss, “a court must accept as true
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`the facts alleged in the complaint as well as all reasonable inferences that may be gleaned from
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`those facts.” Skillgames, LLC v. Brody, 1 A.D.3d 247, 250 (1st Dept. 2003). However, “[i]t is
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`well settled that bare legal conclusions and factual claims which are flatly contradicted by the
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`evidence are not presumed to be true on a motion to dismiss for failure to state a cause of
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`action.” Meyer v. Guinta, 262 A.D.2d 463, 464 (2d Dept. 1999). See also, e.g., Goel v.
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`Ramachandran, 111 A.D.3d 783, 791 (2d Dept. 2013) (“[O]n a motion to dismiss pursuant to
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`CPLR 3211(a)(7), bare legal conclusions are not presumed to be true.” (quotation marks
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`omitted)). A motion to dismiss for failure to state a claim “should be granted where, even
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`viewing the allegations as true, the plaintiff cannot establish a cause of action.” Parekh v. Cain,
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`96 A.D. 3d 812, 815 (2d Dept. 2012).
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`A cause of action for common law fraud or aiding and abetting common law fraud is
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`subject to a “heightened pleading requirement[].” Nomura Home Equity Loan, Inc. v. Nomura
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`Credit and Cap., Inc., 133 A.D. 3d 96, 109 (1st Dept. 2015). “Where a cause of action . . . is
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`based upon misrepresentation [or] fraud . . . the circumstances constituting the wrong shall be
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`stated in detail.” CPLR 3016(b). “Section 3016(b) imposes a more stringent standard of
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`pleading than the generally-applicable notice of the transaction rule of CPLR 3013.” N. Valley
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`Partners, LLC v. Jenkins, 23 Misc. 3d 1112(A), 885 N.Y.S.2d 712, at *5 (N.Y. Sup. 2009)
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`(applying same heightened pleading requirement to cause of action for aiding and abetting
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`fraud). Fraud claims that are not pleaded against individuals with sufficient particularity under
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`this heightened standard must be dismissed. See, e.g., Credit All. Corp. v. Arthur Andersen &
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`Co., 483 N.E.2d 110, 120 (1985) (holding that fraud claim must be dismissed where it fell short
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`of “the special pleading standards required under CPLR 3016(b)”); Greentech Research LLC v.
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`Wissman, 104 A.D.3d 540 (1st Dept. 2013) (“The court properly dismissed the fraud claim for
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`failure to plead fraud with the particularity required by CPLR 3016(b) . . . .”).
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`“Under New York Law, plaintiffs must allege five elements to state a common law fraud
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`claim: (1) a material misrepresentation or omission of fact (2) made by defendants with
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`knowledge of its falsity (3) and intent to defraud, which (4) plaintiffs reasonably relied on, (5)
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`resulting in damage to plaintiffs.” Steadman v. Citigroup Glob. Markets Holdings Inc., 592 F.
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`Supp. 3d 230, 237 (S.D.N.Y. 2022) (quotation marks omitted). The heightened pleading
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`requirement of sufficient particularity applies to each one of the five elements of a common law
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`fraud claim. See, e.g., Silva Run Worldwide Ltd. v. Bear Stearns & Co., No. 96 Civ. 5102 (WK),
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`2000 WL 1672324, at *4 (S.D.N.Y. Nov. 6, 2000) (“To establish scienter in misrepresentation
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`cases, facts must be alleged which particularize how and why each defendant actually knew, or
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`was reckless in not knowing, that the statements were false at the time made.”); Loreley
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`Financing (Jersey) No. 4 Ltd. v. UBS Limited, 42 Misc. 3d 858, 978 N.Y.S.2d 615, 619 (N.Y.
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`Sup. 2013) (“a common law fraud claim must be dismissed if loss causation is not pled with
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`particularity”); Zappin v. Comfort, No. 18 Civ. 1693 (ALC) (OTW), 2022 WL 6241248, at *15
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`(S.D.N.Y. Aug. 29, 2022), report and recommendation adopted, No. 18 Civ. 1693 (ALC)
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`(OTW), 2022 WL 4592551 (S.D.N.Y. Sept. 30, 2022), reconsideration denied, No. 18 Civ. 1693
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`(ALC), 2023 WL 5916564 (S.D.N.Y. Sept. 11, 2023) (applying heightened standard of
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`particularity to the element of reasonable reliance); CIFG Assur. N. Am., Inc. v. Bank of Am.,
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`N.A., 41 Misc. 3d 1203(A), 980 N.Y.S.2d 275 (N.Y. Sup. 2013) (applying heightened standard
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`of particularity to the element of knowledge of falsity).
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`“The elements of a cause of action alleging aiding and abetting fraud are an underlying
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`fraud, the defendants’ knowledge of this fraud, and the defendants’ substantial assistance in the
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`achievement of the fraud, and, pursuant to CPLR 3016(b), the circumstances constituting the
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`wrong must be stated in detail.” Swartz v. Swartz, 145 A.D.3d 818, 824 (2d Dept. 2016)
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`(quotation marks, citations, and brackets omitted). “Substantial assistance exists where (1) a
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`defendant affirmatively assists, helps conceal, or by virtue of failing to act when required to do
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`so enables the fraud to proceed, and (2) the actions of the aider/abettor proximately caused the
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`harm on which the primary liability is predicated.” Stanfield Offshore Leveraged Assets, Ltd. v.
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`Met. Life Ins. Co., 64 A.D.3d 472, 476 (1st Dept. 2009).
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`The Amended Complaint alleges that the ACP operating agreement contains a choice of
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`law clause requiring that disputes arising under or relating to the agreement be governed by
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`Delaware law. This should not affect the choice of law analysis in this case, as Mr. Swati has not
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`been sued for breach of contract, nor do the tiny handful of allegations in the Amended
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`Complaint that mention Mr. Swati have anything to do with the ACP operating agreement. See,
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`e.g., J.A.O. Acquisition Corp. v. Stavitsky, 192 Misc. 2d 7, 745 N.Y.S. 2d 634, 638 (N.Y. Sup.
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`2001) (“New York law applies to these fraudulent inducement claims. While the Stock purchase
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`agreement provides that the parties must apply New Jersey law to claims that arise under the
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`contract, the fraud claim sound in tort, not contract, so the contractual choice of law provision in
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`the Stock purchase agreement is inapplicable to the fraud causes of action.”).
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`In any event, the application of Delaware law to evaluate the sufficiency of Plaintiffs’
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`fraud claims would yield the same analysis, and result, as the application of New York law. The
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`elements of common law fraud in Delaware are substantially the same as those described above
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`under New York law. See, e.g., Gaffin v. Teledyne, Inc., 611 A.2d 467, 472 (Del. Supr. 1992)
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`(requiring a false representation, defendant’s knowledge or belief that the representation was
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`false, intent to induce the plaintiff to act, justifiable reliance by the plaintiff in acting on the
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`alleged misrepresentation, and damage to the plaintiff); Browne v. Robb, 583 A.2d 949, 955
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`(Del. Supr. 1990) (same). Causes of action for common law fraud under Delaware law, as under
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`New York law, are subject to a heightened pleading requirement. See, e.g., Browne, 583 A.2d at
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`955 (plaintiff is required to plead fraud with “particularity”); Brevet Capital Special
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`Opportunities Fund, LP v. Fourth Third, LLC, 2011 WL 3452821, at *7 (Superior Court of
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`Delaware, Aug. 5, 2011) (“Fraud must be plead with particularity.”); Wood v. Baum, 953 A.2d
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`136, 141 (Del. Supr. 2008) (in a fraud claim, “a plaintiff must also plead particularized facts that
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`demonstrate that the [defendants] acted with scienter]”).
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`The elements of a cause of action for aiding and abetting common law fraud are also
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`substantially identical under Delaware and New York law. See, e.g., Clark v. Davenport, 2019
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`WL 3230928, at *15 (Del. Ch. July 18, 2019) (“The elements of a claim for aiding and abetting
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`fraud are (i) an act of fraud by the primary actor, (ii) the secondary actor’s knowledge of the
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`primary actor’s conduct, (iii) substantial encouragement or assistance from the secondary actor,
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`and (iv) causally related damages.”).
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`“The elements of a cause of action to recover damages for breach of fiduciary duty are
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`(1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages
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`directly caused by the defendant's misconduct.” Palmetto Partners, L.P. v. AJW Qualified
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`Partners, LLC, 83 A.D.3d 804, 807–08 (2011) (quotation marks omitted); see also, e.g., Beard
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`Rsch., Inc. v. Kates, 8 A.3d 573, 601 (Del. Ch.), aff'd sub nom. ASDI, Inc. v. Beard Rsch., Inc.,
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`11 A.3d 749 (Del. 2010) (“A claim for breach of fiduciary duty requires proof of two elements:
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`(1) that a fiduciary duty existed and (2) that the defendant breached that duty.”). “A fiduciary
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`relationship arises when one is under a duty to act for or to give advice for the benefit of another
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`upon matters within the scope of the relation. It is grounded in a higher level of trust than
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`normally present in the marketplace between those involved in arm's length business
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`transactions.” DiTolla v. Doral Dental IPA of New York, LLC, 100 A.D.3d 586, 587 (2012)
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`(quotation marks and citations omitted). “The standard of care applicable to the fiduciary duty of
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`care is gross negligence.” Havens v. Attar, 1997 WL 55957, at *11 (Del. Ch. Jan. 30, 1997).
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`“A cause of action sounding in breach of fiduciary duty must be pleaded with the
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`particularity required by CPLR 3016(b).” Palmetto Partners, 83 A.D.3d at 807–08; see also,
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`e.g., Stang LLC v. Hudson Square Hotel, LLC, 158 A.D.3d 446, 446–47 (2018) (affirming
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`dismissal of claim for breach of fiduciary duty because “[s]uch a claim must be pleaded with
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`particularity (see CPLR 3016[b] ), and neither the complaint nor the proposed amended
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`complaint describes how [defendant] breached his fiduciary duty”).
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`A constructive trust is an equitable remedy that can only be considered once unjust
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`enrichment has already been established. See, e.g., Baker v. Harrison, 180 A.D.3d 1210, 1211,
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`(2020). See also, e.g., Teachers' Ret. Sys. of Louisiana v. Aidinoff, 900 A.2d 654, 671 (Del. Ch.
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`2006) (finding that there is no such thing as a claim for constructive trust with its own unique
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`elements, and that it is rather one of a number of alternative remedies that may be available after
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`a plaintiff has prevailed in proving a recognized cause of action).
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`B. The Amended Complaint Fails to State a Cause of Action for Common Law Fraud
`or Aiding and Abetting Common Law Fraud against Jamil Swati
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`
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`The Amended Complaint does not state a cause of action for common law fraud or aiding
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`
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`and abetting the same against Mr. Swati.
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`1. The Amended Complaint Fails to Allege a Material Misrepresentati