In Goldstein v. Mortenson, 113 S.W.3d 769, 777 (Tex. App.--Austin 2003, no pet.), the trial court rendered judgment against defendant Goldstein for more than $ 36 million in actual damages based on findings that he was liable under each of the following claims:
(1) primary violations of the Securities Act;
(2) aiding and abetting primary violations of the Securities Act;
(4) conspiracy to defraud the plaintiff investors. See id. at 774-75.
After adding more than $ 15 million for usury violations, $ 200 million in punitive damages, and prejudgment interest, the trial court rendered judgment against Goldstein for an amount in excess of $ 264 million. See id. at 775.
The court of appeals concluded that the evidence was legally insufficient to support recovery against Goldstein based on the usury violations, the primary violations of the Securities Act, and the claim that Goldstein committed fraud. See id. at 776-82.
The court concluded that the evidence was sufficient to support the finding that Goldstein conspired to defraud the investors and that Goldstein's vicarious liability for fraud satisfied the predicate for punitive damages. See id. at 779-82.
After reducing the punitive damages award to $ 73.2 million based on the punitive damages cap, the court of appeals affirmed a judgment of more than $ 121 million in favor of the plaintiffs. See id. at 783.
Though not necessary to the court of appeals's judgment, the Goldstein court addressed the aiding and abetting theory of recovery, concluding that the evidence was sufficient to support the "general awareness" and "reckless disregard" findings. See id.
The Goldstein court briefly stated that there was sufficient evidence of substantial assistance based on Goldstein's "arranging" of an $ 8.6 million loan for the primary violator. See id.
The court concluded that this assistance was substantial because it "enabled the primary violator to continue to operate, as well as to delay the Securities Board's discovery of wrongdoing." Id. at 777.
The Goldstein court reached this conclusion even though it conceded that there was no evidence that the loan was ever funded or that the primary violator received any money as a result of the proposed loan. See id. at 776-77 & n.8.