Pricaspian Development v. Ficeto CA2/3

facts induced Grynberg to invest, key for our purposes was that Homm had failed to

disclose that he was a 50% partner, with Ficeto, in HWM. On the contrary, Homm

specifically assured Grynberg that he had no interest in any broker-dealer whatsoever.

Grynberg testified that he would not have invested any of Pricaspian’s money in the

Absolute funds had he known of Homm’s interest in a broker-dealer – specifically, an

interest in a broker-dealer which would be used to perform trades for the Absolute

funds.

In August 2005, Pricaspian invested $3 million in the Absolute Octane Fund,

$4 million in Absolute’s European Catalyst Fund, and $3 million in the Absolute

East/West Fund. There were several other Absolute funds which Homm managed;

Pricaspian invested only in the three identified funds. In April 2006, after Pricaspian

received statements indicating its investments were doing well, Pricaspian invested an

additional $2 million in the Absolute Octane Fund, giving it a total investment of

$5 million in that fund.

2. Pricaspian’s Losses

We need not discuss the evidence of fraud in any great detail, beyond the

evidence relevant to the causation of damages. The…