On April 20, 2026, Justice Bannon of the New York County Commercial Division issued a decision in Mojela v. Interactive Brokers LLC, 2026 NY Slip Op. 31754(U), upholding a conversion claim based on a broker’s unreasonable actions in transferring the plaintiff’s property without her consent, explaining:
A cause of action for conversion requires a plaintiff to plead its possessory right or interest in the property and defendant’s dominion over the property or interference with it in derogation of plaintiff’s rights. That is, conversion occurs when someone, intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person’s right of possession. Although the plaintiff adequately alleges her ownership of the shares, she falls short of alleging that the defendant’s unauthorized possession or control of the shares was intentional. Rather, the complaint thinly alleges that an account was opened by someone pretending to be plaintiff and does not allege that the defendant knew of the alleged fraud. No reasonable inference can be made from these allegations that the defendant acted intentionally to deprive the plaintiff of her property.
However, the plaintiff’s complaint, though inartful, does assert that the defendant did not observe or follow reasonable commercial standards when executing the subject transactions. The allegations appear to invoke Uniform Commercial Code 8-318, which provides that an agent or bailee who in good faith (including observance of reasonable commercial standards if he is in the business of buying, selling or otherwise dealing with securities) has received securities and sold, pledged or delivered them according to the instructions of his principal is not liable for conversion or for participated in breach of fiduciary duty although the principal had no right to dispose of them. Notably, it has been held that this good faith requirement is imposed only on brokers acting as mere agents or bailees (or conduits) for the customer. Nonetheless, if the circumstances known to the defendant are so obviously suspicious that no honest person (not just a reasonably prudent person) could turn a blind eye thereto, the defendant must investigate. Therefore, while the plaintiff’s success on her conversion claim is far from certain, applying the liberal standards of pleading as required on a motion pursuant to CPLR 3211(a)(7), this cause of action is not subject to dismissal at this juncture.
(Internal quotations and citations omitted).