Baliga v. Motion
- Victor Marrero
- 1:18-cv-11642
- U.S. District Court · Southern District of New York
- 15
In Wayne Baliga v. Link Motion, Judge Marrero overruled objections with prejudice and denied dismissal of Baliga’s fraud claim for January 2018 purchases, but not later conduct.
Wayne Baliga’s common-law fraud claim may proceed for his January 2018 purchases of Link Motion securities, while the claim based on his continued holding and June, July, and August 2018 purchases cannot proceed. Vincent Wenyong Shi and Link Motion, Inc.’s motion to dismiss was denied.
What happened
In Wayne Baliga v. Link Motion, Inc., Wayne Baliga alleged that Vincent Wenyong Shi and Link Motion made false statements about a transaction and bought or held Link Motion securities as a result. The dispute concerned whether Baliga adequately alleged that he relied on those statements when purchasing additional securities in January 2018.
The court rejected the defendants’ argument that Baliga’s later purchases showed he could not have relied on the earlier statements. It held that Baliga sufficiently alleged reliance because he read the November and December 2017 press releases and said he relied on them when making his January 2018 purchases. The court also found that he described the alleged fraud with enough detail.
Judge Victor Marrero overruled the defendants’ objections with prejudice and denied their motion to dismiss. The common-law fraud claim may continue as to the January 2018 purchases, but Baliga cannot sustain it based on his continued holding of the securities or purchases in June, July, and August 2018.
The detailed version
- Baliga v. Motion · No. 1:18-cv-11642
- Victor Marrero
- Oct. 29, 2025
Background
Wayne Baliga sued Vincent Wenyong Shi, Link Motion, Inc., and others, asserting federal securities-law and state-law claims. The opinion addresses only the defendants’ challenge to Baliga’s common-law fraud claim. Baliga alleged that he bought and held American Depository Shares of Link Motion between January 21, 2014, and January 18, 2019.
The alleged fraud involved Link Motion’s statements about Tongfang SPC’s relationship to Tsinghua Tongfang and Shi’s relationship to Tongfang. Baliga alleged that November and December 2017 press releases falsely described Tongfang as affiliated with Tsinghua Tongfang and did not disclose that Tongfang was an investment vehicle controlled by Shi. He alleged that he reviewed those releases and relied on them when purchasing additional Link Motion shares in January 2018. He also alleged continued ownership and additional purchases in June, July, and August 2018.
Report and recommendation
Magistrate Judge Valerie Figueredo recommended finding that Baliga adequately pleaded reliance for the January 2018 purchases. She recommended finding that he did not adequately plead reliance based on his continued holding of Link Motion shares or his June, July, and August 2018 purchases. The defendants objected to the recommendation concerning the January 2018 purchases.
Court’s analysis
Judge Marrero conducted a de novo review of the challenged portions of the recommendation. Under New York common-law fraud principles, a plaintiff must allege facts showing justifiable reliance on the alleged misrepresentations. The court explained that reliance is ordinarily a fact-specific question and is often not resolved at the motion-to-dismiss stage.
The court held that Baliga adequately alleged justifiable reliance. His complaint identified the November and December 2017 press releases, stated that he reviewed them, and alleged that he relied on their representations when purchasing additional shares in January 2018. The court rejected the argument that Baliga’s purchases after the alleged fraud was disclosed necessarily defeated his earlier reliance. It distinguished a case in which the plaintiff had not alleged how the statements changed her behavior, because Baliga alleged that the statements led him to actually purchase shares.
The court also held that Baliga satisfied Federal Rule of Civil Procedure 9(b), which requires fraud allegations to identify the allegedly false statements, their speaker, when and where they were made, and why they were fraudulent. The court found that Baliga identified the statements, attributed them to Link Motion and Shi, located them in press releases attached to filings with the Securities and Exchange Commission, and explained why he alleged they were false.
Disposition
The court adopted the magistrate judge’s recommendations in their entirety. Judge Marrero ordered that the defendants’ objections were OVERRULED with prejudice. The defendants’ motion to dismiss was DENIED because Baliga adequately pleaded justifiable reliance and could sustain his common-law fraud claim concerning his January 2018 purchases. The court stated that Baliga could not sustain the fraud claim concerning his continued holding of Link Motion shares or his June, July, and August 2018 purchases.
Read the full 15-page opinion on CourtListener, the free public archive maintained by the Free Law Project.