On October 24, 2023, Justice Ruchelsman of the Kings County Commercial Division issued a decision in Lapin v. Verner, 2023 NY Slip Op. 33774(U), holding that a fraud claim cannot be based on a representation that an investment would be conservative, explaining:
In the prior decision the court noted that the complaint did not sufficiently describe the fraud committed and that promising a conservative investment is not fraud. The affidavit of Mr. Lapin does not substantiate the fraud with the necessary specificity at all. Concerning the inducement that alleges fraud the affidavit states that the plaintiff met an individual who said he was aware the plaintiff was a conservative investor and proposed a real estate investment. The affidavit states the individual “told me that he knew that I was a conservative investor and that this was the perfect investment for me, as it was a very conservative investment that was prime Manhattan real estate,” The affidavit then states that the individual “provided me with the offering materials from the Defendants regarding the project, Finally, the affidavit notes that based on those “statements and the documents he provided to me, I decided to invest $250,000, which as I state in the Complaint, was a tremendous amount of money for me and which I only invested based on the assurances I was getting that this was a safe, very conservative investment with an expert in the field who would be running the entire project. This affidavit hardly supplements any specificity deficiencies contained in the complaint. Indeed, the affidavit merely confirms the promises were that the investment was conservative was nothing more than puffery that is not actionable fraud. The affidavit does not explain, with the detail required, the manner in which a reasonable inference of any alleged misconduct can be established. Indeed, statements that are too general to cause a reasonable investor to rely upon them, including statements the investment is conservative·, are not actionable.
(Internal quotations and citations omitted).