On August 7, 2023, Justice Reed of the New York County Commercial Division issued a decision in Cedar Capital Mgt. Group Inc. v. Lillie, 2023 NY Slip Op. 50831(U), dismissing an aiding and abetting fraud claim for failure to plead actual knowledge of, or substantial assistance to, the fraud with particularity, explaining:
A cause of action for aiding and abetting fraud requires the plaintiff to plead the existence of the underlying fraud, actual knowledge, and substantial assistance. The element of actual knowledge need only be pleaded generally. The claim must be pled with particularity.
The complaint herein alleges that defendants had actual knowledge of each of the respective Subject Frauds and provided substantial assistance. This allegation is inadequate to plead either actual knowledge or substantial assistance with the requisite particularity.
(Internal quotations and citations omitted).