Contract analysis

1. Plaintiff Driftwood Absolute Return Fund Ltd. Driftwood Absolute Return Fund Ltd. is a Cayman Islands exempted company registered under the laws of the Cayman Islands with Registration Number MC-349217. (Verified Complaint ("Compl.") ¶ 1.) Driftwood's registered agent is Hargrove Corporate Services Ltd., located at the 4th Floor, Windward House, 94 Elgin Avenue, George Town, Grand Cayman KY1-1104. (Id.) Driftwood

2. Defendant Meridian Prime Capital LLC. Meridian Prime Capital LLC is a New York limited liability company formed on March 14, 2019, with offices at 140 Broadway, Suite 3510, New York, NY 10005 (EIN: 84-3217659). (Compl. ¶ 6.) Meridian Prime held itself out as an institutional FX prime brokerage offering FX forwards, options, and spot execution services to institutional clients. (Id. ¶ 7.) Meridian Prime represented

3. Viktor Zelenko's Background and Prior Disciplinary History. Before founding Meridian Prime, Zelenko was employed as an FX trader at Bridgemont Bank NA from 2006 to 2015, and subsequently at Clarendon Markets LLC from 2015 to 2018. (Compl. ¶ 15.) In 2017, while employed at Clarendon Markets, Zelenko was the subject of a disciplinary action brought by the Financial Industry Regulatory Authority ("FINRA"), resulting

I. LEGAL STANDARD FOR A PRELIMINARY INJUNCTION Under CPLR § 6301, a preliminary injunction may be granted "when it appears that the defendant threatens or is about to do, or is doing or procuring or suffering to be done, an act in violation of the plaintiff's rights respecting the subject of the action, and tending to render the judgment ineffectual." The Court of Appeals has established a well-settled three-part tes

II. DRIFTWOOD IS LIKELY TO SUCCEED ON THE MERITS Driftwood has asserted five causes of action: fraud, conversion, breach of fiduciary duty, unjust enrichment, and alter ego/veil-piercing. As set forth below, the evidence overwhelmingly supports a finding that Driftwood is likely to succeed on each of these claims. A. Fraud (First Cause of Action). To establish a claim for fraud under New York law, a plaintiff must pr

III. DRIFTWOOD WILL SUFFER IRREPARABLE HARM ABSENT A PRELIMINARY INJUNCTION A. Risk of Dissipation Is Established. The irreparable harm element is satisfied where, as here, there is a demonstrated risk that assets will be dissipated or concealed in the absence of injunctive relief. New York courts have repeatedly held that the danger that a judgment will be rendered uncollectible due to the dissipation of assets cons

IV. THE BALANCE OF EQUITIES TIPS DECISIVELY IN DRIFTWOOD'S FAVOR The final element of the preliminary injunction standard — the balance of the equities — weighs overwhelmingly in Driftwood's favor. Driftwood's hardship absent injunctive relief is severe and irreversible. Driftwood is a $1.82 billion institutional hedge fund that deposited $38.5 million in margin and had $8.8 million in settlement proceeds intercepted

V. THE SCOPE OF THE PRELIMINARY INJUNCTION IS APPROPRIATE The preliminary injunction sought by Driftwood is carefully tailored to preserve the identifiable assets that remain traceable to the fraud, while imposing the minimum restraint necessary to protect Driftwood's interests pending adjudication. A. Restraint on Meridian Prime Accounts at Bridgemont Bank NA. The $3.2 million remaining in Meridian Prime's accounts