The message below was sent to me by an attorney in my firm. I thought
participants here would find the information interesting.
Genie Tyburski
Ballard Spahr Andrews & Ingersoll
Philadelphia, PA
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FYI. Part of a thread on the Network 2d list concerning use of the Web for
due diligence:
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From: jjordan@alston.com
Sent: Tuesday, December 05, 1995 10:39 AM
To:
Subject: "Duty to Browse" case
>I heard of a Cal. App. 3d case where the requirement was imposed on a
>financial planner before offering "competent" advice to a client.
>Does anyone know of any cases that have applied this type of
>requirement to a legal situation?
The "duty to browse" case I have seen cited is Whirlpool Financial
Corp. v. GN Holdings, Inc., 1995 U.S. Appeals LEXIS 27600 (7th Cir.
June 6, 1995). The case is not quite that strong but does warn
investors and lenders (such as the $10 million lender in this case
that ended up with a defaulted loan) that "a reasonable investor is
presumed to have information available in the public domain," and that
such knowledge in this case included general industry trends that were
available by Internet. The holding of the case was that the lender
was on "inquiry notice" more than a year before it filed a complaint
that certain financial projections of its borrower were not accurate
and that the lender was now barred by the statute of limitations from
bringing an action under Rule 10b-5 of the Securities Exchange Act of
1934.
Jim Jordan
Intellectual Property Group
Alston & Bird
Atlanta, GA
jjordan@alston.com
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