Shurtleff wants $358M suit against Utah dismissed

Nick Rees Feb. 19, 2010, 11:17am


SALT LAKE CITY (Legal Newsline) - Utah Attorney General Mark Shurtleff has filed court papers asking a judge to dismiss the lawsuit filed by two financial advisers who lost their securities licenses.

The state of Utah is being sued for $358 million by Henry S. Brock and Jay Rice, who claim their constitutional rights were violated by the revocation of their securities licenses. The duo's lawsuit demands that the sanctions against them be lifted.

Brock and Rice were determined by a Utah Division of Securities investigation to have violated state securities law during separate investigations that lasted from 2000 through 2005.

According to Brock and Rice, their rights to due process were violated by the Division of Securities, which they say conducted unreasonable searches and seizures and engaged in malicious prosecution, bribery and witness tampering.

Brock and Rice, in addition to the state of Utah, have named Gov. Gary Herbert, Shurtleff, Department of Commerce head Francine Giani, former Securities Division directors Wayne Klein and Tony Taggart as well as current director Keith Woodwell, and division investigator George Robison as defendants.

Shurtleff's motion to dismiss calls the lawsuit "legally flawed" and calls for its dismissal, noting that Brock and Rice have failed to identify a single federal or state constitutional provision that state officials violated.

The dismissal motion also notes that the plaintiffs cannot sue in federal court several years after either settling with the Division of Securities, which Brock Did, or failing to appeal the division's rulings, as Rice did.

The motion also says that the plaintiffs' lawsuit was filed too late under the statute of limitations and that the state of Utah and its officers are protected by sovereign immunity.

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