Equity is property and the brokers are liable to t

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(“The issue of unjust enrichment is a question of fact.”). Unjust enrichment does not depend on whether the party who received the benefit was a party to the fraud or innocent of it. Georgia Malone & Co. v. Rieder, 19 N.Y. ed 511, 522 973 N.E.2d 743, 750 (2012) (“Unjust enrichment, however, does not require the performance of any wrongful act by the one enriched. . . . Innocent parties may frequently be unjustly enriched.”) (quoting Miller v. Schloss, 218 N.Y. 400, 407, 113 N.E. 337 (1916)).


Like unjust enrichment, a constructive trust is an equitable device that provides a fraud victim a vehicle through which it can remedy the harm done to it. “A constructive trust is a relationship, with respect to property, subjecting the person who holds title to the property to an equitable duty to convey it to another.” Manker v. Manker, 263 Neb. 944, 956, 644 N.W.2d 522, 533 (Neb. 2002) (emphasis added). Where an entity has been unjustly enriched by the acquisition
of title to identifiable property, the recipient of the property must hold it in constructive trust for the benefit of the claimant. Restatement (Third) of Restitution, § 55 (“The obligation of a constructive trustee, for the benefit of the claimant, of the property in question and its traceable product.”). “A constructive trust is ‘the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee.” Moreno-Godoy v. Gallet Dreyer & Berkey, LLP, 14 Civ. 7082, 2016 WL 5817063, at *4 (S.D.N.Y. Oct. 4, 2016) (slip op.). Because a constructive trust is an equitable power intended to remedy fraud, it is a “flexible” remedy that is “not restricted to a specific formula.” Matter of Estate of
8:15-cv-00317-LES-TDT Doc # 149 Filed: 10/21/16 Page 7 of 14 - Page ID # 950
Page 8 of 14 Perkins, No. 1 CA-CV 14-0657, 2016 WL 3660237, at *6 (Ariz. Ct. App. July 5, 2016) (citing Cal X–Tra, 229 Ariz. at 409, ¶¶ 107–08; Murphy Farrell, 229 Ariz. at 130, ¶ 23 (citing Turley v. Ethington, 213 Ariz. 640, 643, ¶ 9 (App. 2006)) (“A constructive trust is not restricted to a specific formula, and instead may be shaped by and tailored to the particular circumstances presented.”))
Together, these doctrines provide a court with equitable power by which it can remedy unjust receipt of funds. The entire purpose of these rules is to remedy the ill-gotten gain. See, e.g., Costell v. First Nat’l Bank of Mobile, 274 Ala. 606, 150 So.2d 683 (1963) (constructive trust where stolen funds used to purchase land); Church v. Bailey, 90 Cal.App.2d 501, 203 P.2d 547 (1949) (constructive trust of that portion of bank account traceable to deposits of stolen funds);
Boyd v. LaMaster, 927 F.2d 237 (6th Cir. 1991) (applying principle to wrongful payment and retention of stock dividends).

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If the broker-dealer fails to deliver for 13 days, the regulation imposes a “close out” duty to purchase and deliver securities “of like kind and quantity.”

https://www.bloomberg.com/opinion/articles/20...ify%20wall

https://www.scotusblog.com/case-files/cases/m...v-manning/

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