Baron Clients Lose Appeal Against ‘Insiders’ for Fraud Aid (1)

Former clients of defunct brokerage A.R. Baron & Co. are at the end of 26 years of litigation, as the Second Circuit on Monday affirmed a ruling that certain allegedly favored customers bore no liability.

Nine investors who said they were victimized by a Baron pump-and-dump scheme lacked evidence that two groups of “insider” customers had actual knowledge of the alleged fraud, the US Court of Appeals for the Second Circuit said.

Their allegations about one group’s preferential treatment in exchange for providing capital to the firm and allowing it to use their accounts to “park” shares—and about another defendant’s ...