Utah judge tosses suit by former advisers

A Utah judge has thrown out a lawsuit filed by two former financial advisers accusing state regulators of violating their constitutional rights by bringing securities violations against them without proof of wrongdoing.
Advisers Henry S. Brock and Jay Rice lost their brokerage licenses after the Utah Securities Division found them to have committed a host of securities violations, including making false promises to seniors at seminars.
In December, the pair filed the lawsuit, which alleged that the state regulators bribed Mr. Rice’s clients, searched Mr. Brock’s computers without permission and sent out a press release announcing the action to bar him from the securities industry that contained false information. They sued the state for $357.6 million.
Last week the U.S. District Court for the District of Utah granted the state’s motion to dismiss the charges, reasoning that many of the defendants’ chargers were insufficient to prove a constitutional violation and that many of the claims had lapsed the four-year statute of limitations in Utah.
“It just shows that it’s easy to say or bring a suit claiming that a government violated the constitutional rights, but it’s difficult to prove it,” said Joni Jones, assistant attorney general for the state of Utah.
The court is giving the advisers until July 29 to file an amended complaint, but the plaintiffs are discussing appealing to a higher court, said JoAnn Secrist, the attorney for Mr. Brock and Mr. Rice.