On June 23, 2022, the First Department issued a decision in Chadha v. Wahedna, 2022 NY Slip Op. 04089, holding that a fraud claim failed for lack of reasonable reliance, explaining:
Supreme Court correctly dismissed plaintiff’s claim that he was fraudulently induced into signing the stock repurchase agreements, as the element of justifiable reliance is not present. On the contrary, plaintiff cannot have justifiably relied on Wahedna’s alleged misrepresentations because, in each stock repurchase agreement, plaintiff represented and warranted that he had all the information he needed to decide whether to sell his shares. Further, plaintiff was the Chief Operating Officer and a director of Wahed, so the value of Wahed, and whether plaintiff owed it a debt, were not facts peculiarly within Wahedna’s knowledge. Therefore, because we decline to unwind the stock repurchases, plaintiff’s claims that are based upon his status as a shareholder were properly dismissed.
(Internal quotations and citations omitted).