Plaintiff Cascade Fund, LLLP (Cascade) invested in three Cayman Islands hedge funds managed by defendant Absolute Capital Management Holdings Limited (ACM).  Florian Homm was ACM’s chief investment officer.  He also owned 50 percent of a California brokerage that dealt in penny stocks.  Homm allegedly invested substantial portions of the funds’ assets in those penny stocks.  The funds apparently carried those stocks on their books at inflated values.  In 2007, certain funds lost about 30 percent of their values when the net asset values were recalculated using the stocks’ actual market values.  Cascade sued ACM, along with the funds’ general partner, Homm, and certain fund directors, alleging that they had violated Rule 10b-5 of the Securities Exchange Act of 1934 by failing to disclose Homm’s relationship with the California brokerage and by misrepresenting the extent to which the funds would invest in unlisted securities and the method the funds would use for reporting the values of those securities.  The defendants moved to dismiss the complaint for lack of standing, absence of personal jurisdiction over the defendants and failure to state a claim.  The court dismissed Cascade’s entire action.  Significantly, it ruled that ACM had sufficient contacts with the United States to warrant the exercise of personal jurisdiction over ACM, but not over the other defendants.  Nevertheless, it dismissed Cascade’s claims against ACM because Cascade failed to plead fraud with the degree of specificity required by the Private Securities Litigation Reform Act of 1995.  It also determined that Cascade had standing to assert fraud claims only with respect to those funds in which it had actually invested.  We outline the facts and the court’s rationale in deciding the motion to dismiss.  Among other things, the decision serves as an excellent primer on the exercise of personal jurisdiction by U.S. courts over offshore entities, such as offshore hedge funds, and non-resident individuals, such as directors of offshore hedge funds.