Contract analysis

I. EXECUTIVE SUMMARY Vantor Holdings Corp. ("Vantor"), through its counsel Whitfield, Dane & Corcoran LLP ("WDC") — specifically Gregory Dane and Allison Breck — raised for the first time in its reply brief filed April 4, 2025, a new argument that the Martin Act (N.Y. Gen. Bus. Law Art. 23-A, §§ 352–359-h) preempts Ironside Capital Management LP's ("Ironside") common-law fraud, fraudulent concealment, and negligent m

II. QUESTION PRESENTED Whether the Martin Act (N.Y. Gen. Bus. Law §§ 352–359-h) preempts the common-law fraud (Count I), fraudulent concealment (Count II), and negligent misrepresentation (Count III) claims asserted by Ironside Capital Management LP against Vantor Holdings Corp. in connection with Vantor's systematic misvaluation of illiquid credit and structured-product positions in its capacity as fund administrato

III. SHORT ANSWER No. The Martin Act preemption doctrine, as articulated by the New York Court of Appeals and refined by the Appellate Division, First Department, applies only to private claims that are "entirely predicated on" violations of the Martin Act — that is, claims arising from deceptive practices in connection with the issuance, exchange, purchase, sale, promotion, or distribution of securities, and that do

IV. FACTUAL BACKGROUND RELEVANT TO THE ANALYSIS A. The Parties and the Contractual Relationship Ironside Capital Management LP. Ironside is a Delaware limited partnership with its principal office at 680 Park Avenue, 34th Floor, New York, NY 10065. It was co-founded in 2009 by Elliot Brennan and Marguerite Dao and operates as a New York–based hedge fund manager with approximately $4.2 billion in assets under manageme

1. Count I — Fraud: Vantor knowingly made material misrepresentations of fact (the inflated NAV figures) upon which Ironside relied to its detriment.

2. Count II — Fraudulent Concealment: Vantor concealed material facts (the staleness of broker quotes, the unauthorized model adjustments, and the internal communications reflecting awareness of inflated marks) that it had a duty to disclose.

3. Count III — Negligent Misrepresentation: Vantor, as a professional fund administrator upon whose expertise and representations Ironside foreseeably relied, failed to exercise reasonable care in preparing and delivering valuations.

4. Count IV — Breach of Contract: Vantor materially breached FAA §§ 3.1 and 4.2 by failing to perform valuation services in accordance with GAAP, the funds' valuation policies, and the contractual standard of care.

5. Count V — Breach of Fiduciary Duty.

6. Count VI — Aiding and Abetting Fraud.

7. Count VII — Unjust Enrichment. Ironside is represented by Calderwood & Harkness LLP. The lead litigation partner is Samuel Eklund, with Yuki Nakamura serving as lead associate. Vantor filed its Motion to Dismiss on February 28, 2025, pursuant to CPLR § 3211(a)(1) (defense founded on documentary evidence) and CPLR § 3211(a)(7) (failure to state a cause of action). The motion raised five grounds for dismissal, none

V. LEGAL FRAMEWORK: THE MARTIN ACT AND PREEMPTION DOCTRINE A. Overview of the Martin Act The Martin Act, codified at N.Y. General Business Law Article 23-A, §§ 352–359-h, is New York's principal anti-fraud statute governing securities and commodities. Enacted in 1921, the statute was originally designed to address the fraudulent promotion of securities to unsuspecting investors during the speculative boom of the earl

VI. ANALYSIS: MARTIN ACT PREEMPTION IS INAPPLICABLE HERE A. Vantor Is Not a Securities Market Participant Regulated by the Martin Act The threshold deficiency in Vantor's preemption argument is that Vantor itself is not a securities market participant of the type regulated by the Martin Act. Vantor is a fund administrator. Its business consists of providing NAV calculation, investor accounting, regulatory reporting s

VII. COUNTER-ARGUMENTS AND RESPONSES A. Vantor's Likely Response: The Misvaluations "Affected" Securities Transactions Vantor may be expected to argue that the overstated NAVs directly caused economic harm in connection with securities transactions. Specifically, Vantor may point to the fact that during the relevant period, 217 investor redemptions were processed at inflated NAV-per-unit prices, resulting in approxim

VIII. IMPLICATIONS FOR ORAL ARGUMENT AND SUR-REPLY STRATEGY In light of the foregoing analysis, the following strategic recommendations are submitted for consideration in connection with the April 14, 2025 oral argument before Justice Torrance and the proposed sur-reply letter brief. Oral Argument. At oral argument, Samuel Eklund should be prepared to address the Martin Act preemption argument in two stages:

1. Procedural Objection (Threshold). Eklund should first object to the court's consideration of Martin Act preemption on the ground that it was raised for the first time in Vantor's reply brief and is therefore not properly before the court. The objection should cite Lumbermens Mut. Cas. Co. v. Morse Shoe Co., 218 A.D.2d 624, 626 (1st Dep't 1995), and Ritt v. Lenox Hill Hosp., 182 A.D.2d 560, 562 (1st Dep't 1992), as

2. Substantive Response (Alternative). In the alternative, if the court elects to consider the argument on the merits, Eklund should address it briefly and decisively. The key points are: (a) The Martin Act does not apply to non-securities service-provider disputes. Vantor is a fund administrator, not a broker-dealer, issuer, or securities distributor. Its conduct — performing valuation services under a commercial se

IX. CONCLUSION The Martin Act preemption argument raised by Vantor in its April 4, 2025 reply brief is meritless and was procedurally improper. It should not succeed. On the merits: The Martin Act regulates fraud in connection with the offering, sale, purchase, exchange, promotion, and distribution of securities. It does not regulate the performance of back-office valuation services by a fund administrator under a co

1. Martin Act Does Not Create a Private Right of Action

2. Common-Law Fraud Claims Survive Martin Act Preemption When They Rest on Independent Duties

3. Martin Act Applies Only to Conduct "In Connection With" Securities Transactions

4. Arguments Raised for the First Time on Reply Are Waived

5. Fund Administrators Are Not Securities Market Participants for Martin Act Purposes This memorandum was prepared on an expedited basis for use in connection with the pending Motion to Dismiss in Ironside Capital Management LP v. Vantor Holdings Corp., Index No. 650312/2025, and is subject to revision as additional authorities are identified or as the litigation develops. All opinions expressed herein are preliminar