[00:00:00] Speaker 00: 824-7025, Robert Goodrich, individually and in his capacity as trustee of the Robert D. Goodrich Revocable Trust and Balance, versus Bank of America, trading as U.S. [00:00:13] Speaker 00: Trust Bank of America, Private Wealth Management, and Matthew Letinga. [00:00:17] Speaker 00: Mr. Costello for the balance, Mr. Smolstat for the appellees. [00:00:23] Speaker 04: Good morning, Mr. Costello. [00:00:25] Speaker 01: Good morning. [00:00:26] Speaker 01: May it please support Thomas Costello here with my partner and Preston on behalf of the appellant Robert Goodrich. [00:00:34] Speaker 01: This case is about Mr. Goodrich hiring investment professionals to provide him with investment advice on how best to manage his savings. [00:00:45] Speaker 01: The core of the complaint is essentially that Bank of America failed in that regard by failing to tell explain to him the catastrophic catastrophic [00:00:55] Speaker 01: consequences of a complete liquidation of his investment portfolio right at the beginning of the COVID pandemic in late March of 2020. [00:01:06] Speaker 05: So when he called to give the instruction about selling, there was a conversation after the fact during that time period about some of the issues about how he would further eradicate his savings [00:01:25] Speaker 05: And then he had a second instruction that says, but go ahead and sell. [00:01:30] Speaker 01: Respectfully, your honor, I don't think the facts are quite as you've explained it there. [00:01:35] Speaker 01: I think the facts and the record reflect that during the month of March, his investment portfolio was declining in value. [00:01:44] Speaker 01: He had conversations with Bank of America about his concerns. [00:01:49] Speaker 01: and essentially Bank of America in response provided an incomplete statement as to the consequences or risks of a portfolio liquidation. [00:01:59] Speaker 01: Essentially what Bank of America explained is, hey, if you sell now and go to cash, you might miss some of the upside when you decide to reinvest. [00:02:09] Speaker 01: What this whole case is about [00:02:11] Speaker 01: is what they didn't explain is that because Mr. Goodrich's unique financial situation was as follows. [00:02:19] Speaker 01: His investment account served as collateral for two lines of credit [00:02:23] Speaker 01: that Bank of America advised him to acquire and that going to cash would not allow him to reinvest at some point because he would now realize these losses in his account, bring down the value of the account at this cash level to where he would only have a small percentage of his assets to reinvest above the collateral limits. [00:02:47] Speaker 05: What if the facts were a little different in the sense that there was an instruction to sell, then Bank of America said, just ignored it or just didn't do it timely, you know, just waited maybe 10 days or so, and then it continued to decline. [00:03:03] Speaker 05: Will we still be here? [00:03:05] Speaker 01: Well, the terms of the relationship with Bank of America provide Bank of America with what they describe as complete [00:03:15] Speaker 01: investment authority so the exception of having an instruction from a client well it tells them to do something specific if the client goes to bank of america and as you say as you phrase it gives them an instruction uh it's our position in this case that their fiduciary obligations as money managers would require them [00:03:39] Speaker 01: to explain all the consequences of acting on that instruction. [00:03:44] Speaker 01: And that did not happen when they view the facts. [00:03:47] Speaker 04: You've got to convince us that language in the contract, which says that our liability is limited to what this contract says and not essentially tort or common law claims. [00:04:01] Speaker 04: You've got to convince us to not enforce that language, which your client, which was in the agreement that your client signed. [00:04:09] Speaker 01: Sure. [00:04:10] Speaker 01: And I think we provide multiple legal theories for finding that the contract does not prevent the claims that are set forth in the complaint. [00:04:20] Speaker 01: First and foremost, to the extent the contract, which never says this, by the way, that they're disclaiming their fiduciary obligations. [00:04:29] Speaker 04: It says, tort or common law. [00:04:33] Speaker 04: But your breach of fiduciary duty claim and your gross negligent claim are either tort or common law or both. [00:04:43] Speaker 01: OK, well, I think the contract would have to explain what that means, because people who read that 60-something page booklet after they get it don't know what a tort is and don't know what the common law is. [00:04:55] Speaker 01: The law in the district. [00:04:56] Speaker 04: So you're saying that the law in the District of Columbia would require for an exclusion [00:05:03] Speaker 04: of that nature to be enforced that you have to define all relevant terms. [00:05:11] Speaker 01: Yes, you if you were going to the law, the District Columbia and the primary case is the more versus Wallace case. [00:05:20] Speaker 01: If you're going to have an exculpatory clause, a disclaimer, it must be clear and unequivocal. [00:05:26] Speaker 04: And the problem that's different than saying every term has to be on. [00:05:32] Speaker 04: Well, if you're going to be here, what's unclear about saying you can't bring any Twitter common law thing? [00:05:38] Speaker 04: What's unclear about that? [00:05:41] Speaker 01: Because other than a lawyer, people aren't going to understand that. [00:05:46] Speaker 03: How about this one? [00:05:47] Speaker 03: Bank of America is responsible for the performance of only such duties as are specifically set forth in this agreement with no implied duties or responsibilities. [00:05:58] Speaker 03: Again, it's clear as day. [00:06:01] Speaker 01: Respectfully, I don't think that would be clear to a retail consumer of investment management services. [00:06:07] Speaker 01: But getting back to it, one, [00:06:10] Speaker 01: Bank of America is prohibited by the Investment Advisors Act under the D.C. [00:06:16] Speaker 01: Securities Act and the Securities Act of 1934 from contracting away their obligations of full disclosure when serving under the securities statute. [00:06:32] Speaker 01: Right, the security statute say you cannot contract away your obligation under those statutes. [00:06:38] Speaker 01: We did bring a claim under the DC Securities Act. [00:06:41] Speaker 03: Right, but we're talking about the common law claims right now. [00:06:44] Speaker 01: OK, so well, first of all, it's in our papers. [00:06:49] Speaker 01: We think under those statutory schemes, they're not allowed to disclaim their fiduciary obligations. [00:06:55] Speaker 01: Secondly, with regard to just the law of the District of Columbia with regard to disclaimers, [00:07:02] Speaker 01: and exculpatory clauses, it's not clear because at the same time they hand him this booklet after the fact, after he initiated his relationship, never explaining to him that, hey, by taking possession of this booklet, you're waiving legal rights. [00:07:19] Speaker 01: At the same time, they give him documents which say, we are fiduciaries. [00:07:23] Speaker 01: We are going to handle your accounts at the highest standard. [00:07:27] Speaker 01: We do have complete investment authority. [00:07:31] Speaker 01: They are also giving him promotional materials that say they are fiduciaries and will honor fiduciary obligations. [00:07:37] Speaker 01: So when you hand a client all kinds of documents like that that contradict each other, it is not clear and unequivocal. [00:07:46] Speaker 03: What about this one? [00:07:48] Speaker 03: Owner will be liable for any losses resulting from owner's instruction to the bank. [00:07:55] Speaker 01: I don't think that that language is unclear. [00:07:58] Speaker 01: However, in this situation, that doesn't excuse Bank of America's obligation that if they perceive that a customer is giving them an instruction, they have to explain the consequences of acting on that instruction, and they did not. [00:08:14] Speaker 03: and there were losses resulting from the instruction to sell. [00:08:21] Speaker 03: He calls up, he says, sell, they sell. [00:08:24] Speaker 01: Again, I think there's a factual dispute as to one, they are the discretionary money manager. [00:08:30] Speaker 01: They are the ones who they describe themselves as having complete investment authority. [00:08:35] Speaker 01: They are the ones who choose to accept the instruction or not under that discretionary authority. [00:08:41] Speaker 03: You think they have you think they have discretion to disobey a client instruction? [00:08:48] Speaker 01: They did that in this case and it's alleged in the complaint when Mr. Goodrich asked to have his money reinvested and he said they said no. [00:08:56] Speaker 01: So yes, those are the facts of the case. [00:09:02] Speaker 01: So with regard to that issue, [00:09:05] Speaker 01: One, we think the securities law statutory scheme prohibits the disclaimer of fiduciary responsibilities. [00:09:12] Speaker 01: We think that the booklet itself is not clear and unequivocal in terms of it disclaiming its fiduciary obligations. [00:09:21] Speaker 01: We think that the fact that Bank of America provided Mr. Goodrich with other documents that he signed and which were agreements, [00:09:29] Speaker 01: that said they would be a fiduciary and manage the account and the fiduciary obligation and act to the highest standards, then again, that makes those disclaimers not clear and unequivocal. [00:09:40] Speaker 05: Can you address the CNTA requirement with respect to the District of Columbia? [00:09:46] Speaker 01: Yes, ma'am. [00:09:47] Speaker 01: So the CNTA requirement is satisfied by demonstrating not only intentional conduct, but reckless conduct. [00:09:53] Speaker 01: and reckless conduct can be evidenced by a financial advisor failing to disclose known risks to a client in connection with a transaction. [00:10:04] Speaker 05: Would you agree that that's an issue of first impression, at least with respect to the D.C. [00:10:08] Speaker 05: securities law? [00:10:10] Speaker 01: I don't think that there's much pace law in the District of Columbia that talks about recklessness and CNTER. [00:10:18] Speaker 01: I would agree with you, but other jurisdictions dealing with that issue under the securities law have uniformly found that recklessness does satisfy the CNTER requirement. [00:10:31] Speaker 01: And there are legal authority out there, specifically a case called Kerr versus Smith Barney, that an advisor [00:10:39] Speaker 01: who knowingly fails to disclose known risk to a client satisfies the recklessness aspect. [00:10:45] Speaker 05: Should we allow the DC Court of Appeals to address the enter requirement with respect to this DC securities law? [00:10:55] Speaker 01: Obviously, that's your prerogative. [00:10:56] Speaker 01: I think because this issue of CNTER and the issue of recklessness satisfying the CNTER requirement [00:11:06] Speaker 01: being pretty universal. [00:11:08] Speaker 01: I don't know that it's necessary. [00:11:11] Speaker 01: I do think the other issue of whether you even have to prove CNTER under the DC Securities Act is an issue of first impression and is not clear. [00:11:20] Speaker 01: The DC Securities Act is based on the Uniform Securities Act and the jurisdictions are split as to whether CNTER is required. [00:11:30] Speaker 01: So that would be an issue of first impression for the District of Columbia. [00:11:37] Speaker 04: We'll give you some time on rebounding. [00:11:39] Speaker 04: Thank you, sir. [00:11:48] Speaker 02: Good morning. [00:11:49] Speaker 02: Good morning, and may it please the court, Brian Schmalzbach for the defendants. [00:11:52] Speaker 02: At the start of a global pandemic, Mr. Goodrich ordered his investment manager to sell his entire portfolio against that manager's recommendation just before the market's opening bell. [00:12:04] Speaker 02: Now, he's suing that investment manager for following his instructions. [00:12:08] Speaker 02: This court should affirm because faithfully executing a client's urgent financial instruction is neither a breach of fiduciary duty nor securities fraud. [00:12:17] Speaker 05: So do you believe that as soon as the instruction comes in, you follow it? [00:12:21] Speaker 05: Or is there any fiduciary duty or obligation or any other type of duty with respect to just kind of talking that client off the ledge? [00:12:31] Speaker 05: They paid for advice. [00:12:33] Speaker 02: So here, Your Honor, I would say start with the context, which is that this is a conversation starting at 9 o'clock, went 10 or 20 minutes before the 930 opening bell. [00:12:41] Speaker 02: But I would say no. [00:12:43] Speaker 02: Both the contract and the third restatement of agency are clear that when you get an instruction from a client, you follow it. [00:12:51] Speaker 02: And we did go above and beyond and say, this is not consistent with your long-term strategy. [00:12:57] Speaker 02: And Mr. Goodrich said, I don't care. [00:12:59] Speaker 02: I can't handle the risk. [00:13:00] Speaker 05: The client is hiring you for the advice. [00:13:02] Speaker 05: They are not the expert. [00:13:04] Speaker 05: And so when you say just get the instruction and you just follow it, that just sounds against why they hired you, the reason for why they hired you. [00:13:11] Speaker 02: And I want to make clear that the scope of what Bank of America was hired for is laid out in the contract. [00:13:18] Speaker 02: So I think we need to consult the contract to answer that question. [00:13:21] Speaker 02: And there's three specific parts I would point you to. [00:13:23] Speaker 02: They're both on JA 231. [00:13:25] Speaker 02: All three are on 231 and 232. [00:13:28] Speaker 02: The first on 232 is that there's no duty to advise on what the client's own investment objectives are. [00:13:36] Speaker 02: We take as a given what you want to accomplish when you invest your money. [00:13:41] Speaker 02: The second is that there's no duty to advise when a client directs you to make specific investment choices. [00:13:47] Speaker 02: Because you're right, in the ordinary course, we would make decisions on Mr. Goodrich's behalf, and we would have a duty to do that with [00:13:57] Speaker 02: with care and with loyalty. [00:13:58] Speaker 02: But on page 231, the agreement is very clear that when you tell us specifically what to do, then we are just a custodian. [00:14:08] Speaker 02: Then we're just executing your orders. [00:14:10] Speaker 02: We don't have a duty to advise or ensure it's consistent with your strategy otherwise. [00:14:15] Speaker 05: And so that that limits go further and you do advise. [00:14:19] Speaker 05: Then what is the [00:14:20] Speaker 05: scope of any potential liability. [00:14:23] Speaker 02: I think the fact that we tried to talk him out of this instruction and he couldn't be budged doesn't mean that we've undertaken some, that we've changed that part of the contract. [00:14:35] Speaker 02: And the contract does have an anti-waiver provision that says by undertaking that limited duty, we're not changing what the contract says about when you give us a specific instruction, we're just acting as a custodian. [00:14:47] Speaker 05: The question I asked earlier, [00:14:50] Speaker 05: the client then instructs you to do something, like sell, and you wait five days, you wait ten days, and you don't do it then. [00:14:57] Speaker 05: Do you then agree that you have liability because you didn't follow the instruction? [00:15:01] Speaker 02: I think we may well, Your Honor, and I want to point out an important difference between this case and the Trumbull case in the Fourth Circuit, and it's a difference in contractual language. [00:15:10] Speaker 02: What the contract in Trumbull says is that the investment manager [00:15:14] Speaker 02: shall in its discretion follow and rely on client instructions. [00:15:20] Speaker 02: There's no language like that in this contract. [00:15:22] Speaker 02: I think we would have a very hard time succeeding in the argument that we have discretion to disobey client instructions. [00:15:31] Speaker 02: And to be clear, Your Honor, the hypo that you just posited, where we wait five days to execute this instruction, that's not waiting. [00:15:38] Speaker 02: That's outright disobedience. [00:15:40] Speaker 02: Because the instruction here was, [00:15:41] Speaker 02: sell at the open. [00:15:43] Speaker 02: I think the market's going to crash. [00:15:44] Speaker 02: I want to get out now. [00:15:46] Speaker 02: And so if we waited five days, very likely we would be facing a lawsuit on coming from the other perspective, saying you didn't obey my instruction and you're liable for that. [00:15:58] Speaker 04: Let's suppose [00:16:01] Speaker 04: What had happened is that he calls and then he hears, he says, sell, but they say, don't sell. [00:16:09] Speaker 04: And they say what they said. [00:16:11] Speaker 04: And he's like, OK, I agree. [00:16:17] Speaker 04: Don't sell. [00:16:18] Speaker 04: Just do what you think is best. [00:16:21] Speaker 04: And the investment advisor purchases changes his buy some stock [00:16:31] Speaker 04: that everyone agrees was a reckless purchase and he loses his investment. [00:16:40] Speaker 04: Does he have a breach of fiduciary duty claim? [00:16:44] Speaker 02: I think he might, if in that circumstance, your honor, if I understand it correctly, that we don't have an instruction to rely on. [00:16:50] Speaker 02: We just have the ordinary contractual fiduciary obligation to invest with due care and with loyalty to him. [00:16:58] Speaker 02: And there we couldn't say that we're relying on this instruction. [00:17:00] Speaker 02: We couldn't rely on these provisions on page 231 and 232. [00:17:04] Speaker 02: of the Joint Appendix because there's no instruction. [00:17:07] Speaker 02: He just says, use your judgment. [00:17:09] Speaker 02: At that point, yes, we would have no contractual defense to the sort of claim that you could make in that circumstance. [00:17:17] Speaker 04: So you believe that the exclusion of common law and tort claims doesn't apply. [00:17:25] Speaker 04: Generally, it just applies where there's an instruction. [00:17:30] Speaker 02: I think it could also apply generally. [00:17:32] Speaker 02: I just think [00:17:32] Speaker 02: It's a more straightforward argument here to say where we didn't sign up to be an all purpose fiduciary. [00:17:38] Speaker 02: I think that's the fundamental legal error that my friend is making. [00:17:41] Speaker 04: I'm trying to understand how to how to construe this exclusion. [00:17:46] Speaker 04: Right? [00:17:47] Speaker 04: Well, it's an exclusion only in some circumstances and all circumstances or no circumstances. [00:17:56] Speaker 02: So Your Honor, to be clear, there would still be a claim for gross negligence in the hypothetical that you posited, because that's not disclaimed in the agreement. [00:18:06] Speaker 02: So that's the sort of grossly negligent breach of fiduciary claim that Mr. Goodrich is making here. [00:18:12] Speaker 02: And I think in that hypothetical, then he could also press that claim, because that's not disclaimed by the contract. [00:18:19] Speaker 02: But the broader point I want to make is that there's not some freestanding rule that if you dip a toe in the fiduciary waters, you have to go all the way in up to your neck. [00:18:31] Speaker 02: Because that's not what the restatement says. [00:18:35] Speaker 02: The restatement in section 8.01 says that the scope of your fiduciary duties is controlled by your agreement. [00:18:41] Speaker 02: You don't have to take on more duties than you've agreed to take on. [00:18:46] Speaker 02: But Your Honors, we've talked about the breach of fiduciary duty claim. [00:18:49] Speaker 02: I'd like to briefly address an alternate ground for affirming the dismissal of that claim. [00:18:55] Speaker 02: And that's that there's no gross negligence pleaded. [00:18:57] Speaker 02: And I know there was some. [00:18:59] Speaker 02: These were addressed as separate issues in the district court. [00:19:02] Speaker 02: But there's a concession at pages 14 to 15 of Mr. Goodrich's reply brief here, which is that he's not asserting an ordinary negligence breach of fiduciary duty [00:19:14] Speaker 02: The only breach of fiduciary duty claim here is one for gross negligence. [00:19:19] Speaker 02: And so that means that the inability, the failure to plead gross negligence in the complaint, that resolves this whole breach of fiduciary duty claim as well. [00:19:28] Speaker 02: It's an alternate ground that you can rely on. [00:19:31] Speaker 02: And the district court was right in addressing the gross negligence claim that he can't meet the very high standard under the Hawkins case for gross negligence under DC law. [00:19:41] Speaker 02: First, there's no bad faith here. [00:19:42] Speaker 02: There can't be bad faith. [00:19:43] Speaker 02: We tried to talk him out of it. [00:19:45] Speaker 02: This is not our idea. [00:19:46] Speaker 02: And we tried to get him not to get that instruction, but he insisted on the instruction. [00:19:52] Speaker 02: And second, there's no risk so obvious that the defendant must be aware of it [00:19:56] Speaker 02: and so great that it's highly probable that harm would fault. [00:20:00] Speaker 02: And it's just implausible to assert here that we predicted the future of the market and how it would affect his account. [00:20:07] Speaker 05: And do you agree that this instruction nullifies all of the other written materials that the client was given? [00:20:17] Speaker 05: Are you referring to the- In other words, the oral instruction [00:20:20] Speaker 05: nullifies all the other written materials with respect to the advice and how you carry out the fiduciary relationship like that instruction just kind of closes off everything that instruction does control and the [00:20:33] Speaker 02: The contract, the investment services agreement, anticipates this problem. [00:20:36] Speaker 02: And it doesn't say, for example, that you can only change your investment objectives in writing. [00:20:43] Speaker 02: You can only provide a controlling instruction in writing. [00:20:46] Speaker 02: It acknowledges that there are scenarios where oral instructions will be necessary. [00:20:50] Speaker 02: And this is a great example of why. [00:20:52] Speaker 02: If he has this urgent instruction, I need it carried out post-haste before the market crashes. [00:20:58] Speaker 02: If we say, oh, sorry, no can do, you need to submit it in writing, we can't obey that instruction. [00:21:03] Speaker 02: And he would lose the benefit of giving that instruction. [00:21:06] Speaker 02: So yes, Your Honor, an oral instruction is anticipated by this agreement. [00:21:11] Speaker 02: I'd like to briefly address the DC Securities Act claim. [00:21:16] Speaker 02: Your Honor, science is required. [00:21:18] Speaker 02: The complaint says that we, quote, engage in a scheme, device, and or artifice to defraud. [00:21:24] Speaker 02: That's at JA 199. [00:21:26] Speaker 02: That's quoting the language of section 2A1A of section 560502, which in turn is quoting rule 10B5. [00:21:38] Speaker 02: And the district court correctly applied the old soil principle that when you take that exact language from rule 10B5, transplant it into the DC Securities Act, [00:21:47] Speaker 02: brings the old soil with it. [00:21:49] Speaker 02: And Judge Childs, to your question, I don't think there's any need to certify that question. [00:21:54] Speaker 02: It is a remarkably specific [00:21:58] Speaker 02: transplantation of that language. [00:22:00] Speaker 02: And so there's no, I'm not aware of any case, and that has been cited in the briefs, that when you bring that exact language from Rule 10b-5, where it's long been established that it has a science requirement, that in the transplanted blue sky law, it has that same science requirement. [00:22:18] Speaker 02: I know my friend mentioned that there's a split in jurisdictions. [00:22:22] Speaker 02: There's no split in jurisdictions on the language in the complaint on this scheme, device, or artifice to defraud. [00:22:29] Speaker 02: There are other provisions of typical blue sky statutes that do not require science here. [00:22:35] Speaker 02: But the complaint is very clear that it's section A1A that's asserted here. [00:22:39] Speaker 02: That's the claim that the district court addressed. [00:22:43] Speaker 02: And the opening brief didn't say anything about any other claim. [00:22:46] Speaker 02: So I don't think there's any ambiguity on the science requirement applying [00:22:52] Speaker 03: Cianta requirement is much closer for A1B. [00:22:58] Speaker 03: Your position is that just wasn't asserted in the complaint? [00:23:01] Speaker 02: It wasn't asserted in the complaint. [00:23:03] Speaker 02: I quoted the operative language of the complaint, which is quoting A1A. [00:23:07] Speaker 02: And any argument about A1B is waived here, Your Honor, because the district court was very clear in the opinion that it's an A1A claim. [00:23:20] Speaker 02: The district court was clear that argument that it's actually a hidden A1B claim was not briefed below. [00:23:27] Speaker 02: And it wasn't mentioned in the opening brief later. [00:23:28] Speaker 02: So it's waived twice over. [00:23:32] Speaker 02: And just on applying the science requirement here, Your Honors, this is a remarkably implausible theory. [00:23:40] Speaker 02: Again, there's no intentional fraud. [00:23:42] Speaker 02: We tried to talk him out of it. [00:23:44] Speaker 02: This isn't something bad that we got him to do. [00:23:46] Speaker 02: We tried to get him not to do it. [00:23:48] Speaker 02: There's no allegation that Bank of America benefited from the sale. [00:23:51] Speaker 02: To the contrary, this account is structured in a way that when the customer does well, the bank does well. [00:23:56] Speaker 02: It's by a proportion of assets under management. [00:23:59] Speaker 02: The theory instead seems to be that we should have tried even harder to talk him out of this instruction right before the market opened. [00:24:07] Speaker 02: But I doubt that that could even satisfy the requirement for ordinary negligence. [00:24:11] Speaker 02: But certainly here, it doesn't come remotely close to meeting the requirement for intentional wrongdoing or extreme recklessness. [00:24:19] Speaker 02: So if the court has no further questions, we'd ask you to affirm. [00:24:22] Speaker 04: Thank you. [00:24:31] Speaker 04: Mr Costello will give you two minutes for rebuttal. [00:24:34] Speaker 01: Thank you, Your Honor. [00:24:35] Speaker 01: Briefly, my colleague said that they were obligated to follow the instructions of Mr. Goodrich. [00:24:42] Speaker 01: They did not follow the instructions of Mr. Goodrich when he asked to be reinvested. [00:24:47] Speaker 01: This is a factual dispute as to what constitutes an instruction and what their complete discretionary investment authority would be. [00:24:55] Speaker 01: They can't have it selectively. [00:24:56] Speaker 01: They can't do it both ways. [00:24:58] Speaker 01: And the information in the record [00:25:00] Speaker 01: is that they're selectively choosing. [00:25:07] Speaker 01: There is a duty to advise a client when a client proposes an imprudent transaction that authorities set forth in the briefing. [00:25:18] Speaker 01: The contract says that the only duties they have, or the terms booklet says, the only duties they have are what are set forth in the terms booklet. [00:25:29] Speaker 01: The terms booklet doesn't set forth any duties. [00:25:33] Speaker 01: All it does is provide a series of outs for Bank of America. [00:25:39] Speaker 01: It doesn't say what they're going to do. [00:25:40] Speaker 01: The only contract they gave him that said what they were going to do said they were going to be fiduciaries and said that they were going to act to the highest standard. [00:25:50] Speaker 01: The contract, a contract which doesn't set forth any duties, again, cannot be held to obviate my client's claims in this case. [00:26:02] Speaker 01: With regard to the gross negligence, again, recklessness, consciousness behavior, those things satisfy [00:26:10] Speaker 01: the gross negligence standard. [00:26:13] Speaker 01: We cited the authorities for that. [00:26:15] Speaker 01: Here it is alleged that Bank of America knowingly executed a transaction which they understood would cause catastrophic losses for my client. [00:26:29] Speaker 01: With regard to the DC Securities Act, again, CNTER can be satisfied by recklessness, conscious indifference, and we've cited specific authorities that say a advisor who knows of a known risk and doesn't share it with a client prior to a transaction is acting recklessly. [00:26:48] Speaker 01: So with that, I thank you for your time. [00:26:51] Speaker 04: Thank you. [00:26:51] Speaker 04: The matter is submitted.