Press Release February 11, 2016

Alston & Bird Client Blu Funds Wins Ruling on Sovereign Immunity

On behalf of client Blu Funds, Alston & Bird secured a significant victory in the U.S. Court of Appeals for the Second Circuit.

In a unanimous decision, the Court held that a Kazakhstani sovereign wealth fund must face securities fraud claims brought by Blu Funds and several related entities, which allege that the sovereign wealth fund misrepresented the value of bonds issued by a state-backed bank. The Second Circuit affirmed the prior decision of the U.S. District Court for the Southern District of New York.

In affirming the District Court’s denial of the wealth fund’s motion to dismiss the claims on sovereign immunity grounds, the Second Circuit held that the Foreign Sovereign Immunities Act does not immunize instrumentalities of foreign sovereigns against claims that it made misrepresentations outside the United States in connection with the sale of securities to U.S. investors.

The case began after Blu Funds and other investors sued the Sovereign Wealth Fund Samruk‐Kazyna JSC, claiming it lied about the value of notes issued by BTA Bank JSC – in which the SK Fund has a controlling stake – in connection with a 2010 restructuring of BTA Bank’s debt.

Representing Blu Funds are Litigation & Trial Practice partners Brett Jaffe and Jennifer Kozar.

Media Contact
Nicholas Clarke
Senior Communications Manager
Phone: 212.210.1222
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