Georgia Alexander v. Citigroup Global Markets

MEMORANDUM

Plaintiff-Appellant Georgia Alexander appeals the dismissal of her claims for securities fraud under Section 10(b) of the Securities Exchange Act, 15 U.S.C. § 78j(b), and SEC Rule 10b-5, 17 C.F.R. § 240 .10b-5; violation of SEC Rule 10b-16, 17 C.F.R. § 240 .10b-16; and breach of fiduciary duty under California law. Because the parties are familiar with the facts and procedural history, we do not restate them except as necessary to explain our decision. We have jurisdiction under 28 U.S.C. § 1291 , and we affirm.

1. Plaintiffs asserting Rule 10b-5 claims must allege that the defendant made a material false statement or omission, and must also allege a strong inference of scienter. Rubke v. Capitol Bancorp. Ltd., 551 F.3d 1156, 1164-65 (9th Cir.2009). The express terms of Alexander’s client agreements explained that Morgan Stanley could sell her stock without demand for payment and without notice in order to meet margin requirements, and that Morgan Stanley could change the margin requirements without notice. The account conversion materials also explained that Alexander could see a change in borrowing power and margin requirements after the conversion. Given these…