Defendant RAM Capital Resources, LLC (RAM Capital), is a New York based asset manager and hedge fund sponsor. Defendants Stephen E. Saltzstein (Saltzstein) and Michael E. Fein (Fein) are RAM Capital’s principals. Saltzstein was introduced to plaintiff Mario Frati through Saltzstein’s sister, who was a childhood friend of Mario Frati’s wife. The Fratis invested $2 million in RAM Capital’s Shelter Island Opportunity Fund, LLC. Plaintiff Banco Popolare (Luxembourg), S.A., on behalf of Mr. Frati’s mother, invested $1.5 million with RAM Capital’s Truk International Fund, LP. When plaintiffs’ redemption demands were not satisfied, plaintiffs brought suit. Their complaint, as amended, alleges federal securities fraud, common law fraud, breach of fiduciary duty, unjust enrichment and breach of contract. Plaintiffs claim the defendants misrepresented, among other things, that plaintiffs could redeem their investments after six months and that RAM Capital’s principals were “heavily invested” in the sponsored funds. Defendants allegedly also wrongfully omitted to tell plaintiffs that RAM Capital, Saltzstein and Fein were under investigation by the Securities and Exchange Commission and that they were not registered broker-dealers. See “Investors in Hedge Funds Managed by RAM Capital Resources, LLC Sue RAM, its Principals and its Funds Alleging Securities Fraud, RICO Violations and Other Claims Based on Alleged Misrepresentations and Self-Dealing by RAM Principals
,” Hedge Fund Law Report, Vol. 3, No. 20 (May 21, 2010). Defendants moved to dismiss the entire complaint for failure to state a claim. We summarize the Court’s decision on defendants’ motion to dismiss.