AER Advisors Inc. v. Fidelity Brokerage Svcs., LLC, 921 F.3d 282

AER Advisors and clients William and Peter Deutsch sued Fidelity after Fidelity allegedly lent the Deutsch family’s China Medical shares without notice, triggering a short squeeze and subsequent SEC/state investigations.
Fidelity filed a Suspicious Activity Report (SAR) accusing the Deutsches of market manipulation; plaintiffs claim the SAR was knowingly false and used to conceal Fidelity’s own misconduct.
Plaintiffs originally sued in the Southern District of Florida on various Florida-law tort and contract theories tied to the SAR; the case was transferred to the District of Massachusetts under 28 U.S.C. § 1404(a).
In Massachusetts, Fidelity moved to dismiss under Fed. R. Civ. P. 12(b)(6), arguing the Bank Secrecy Act (BSA) provides absolute civil immunity for SAR filings, citing First Circuit precedent (Stoutt).
The district court applied First Circuit law, granted dismissal based on BSA immunity, and plaintiffs appealed to the First Circuit.
The First Circuit affirmed, holding transferee courts apply their own circuit’s federal-law precedent and that Stoutt bars private suits against financial institutions for SARs so long as the report discloses "any possible violation of law."

Issue	Plaintiff's Argument	Defendant's Argument	Held
Which circuit's federal-law precedent governs after a § 1404(a) transfer	Eleventh Circuit law (Lopez) should apply because case originated in Florida	Transferee court applies its own circuit’s federal-law precedents	First Circuit law governs; transferee applies its circuit’s federal-law interpretation
Does BSA immunity require good faith or objective reasonableness	Plaintiffs: immunity should be limited where SARs are filed in bad faith or assert "objectively impossible" violations	Fidelity: BSA grants unqualified immunity for disclosures of "any possible violation of law"	Court: BSA immunity is unqualified; no good-faith requirement — Stoutt controls
Can plaintiffs sue in state law for harms caused by an allegedly false SAR	Plaintiffs: state-law torts survive because SAR was knowingly false and malicious	Fidelity: BSA preempts/insulates such private suits for SAR disclosures	Held: Private state-law claims dismissed where SAR discloses a possible violation; BSA bars suit
Are alternative remedies (criminal/government sanctions) adequate to address malicious SARs	Plaintiffs argue policy favors permitting private suits to deter misconduct	Fidelity and court: criminal penalties and administrative sanctions suffice; private suit would chill reporting	Held: Policy concerns support broad immunity; Congress omitted a private-good-faith limitation and preferred public enforcement mechanisms

Stoutt v. Banco Popular de Puerto Rico, 320 F.3d 26 (1st Cir. 2003) (holds BSA immunity covers disclosures of "any possible violation" and does not require good faith)
Lopez v. First Union Nat. Bank of Fla., 129 F.3d 1186 (11th Cir. 1997) (holds BSA immunity requires a good-faith suspicion)
Lee v. Bankers Trust Co., 166 F.3d 540 (2d Cir. 1999) (reads the BSA text as creating an unqualified privilege for reports of possible violations)
Van Dusen v. Barrack, 376 U.S. 612 (1964) (transfer under § 1404(a) generally preserves transferor’s choice-of-law for state-law issues)
Ferens v. John Deere Co., 494 U.S. 516 (1990) (reinforces Van Dusen on applying transferor’s state law in § 1404(a) transfers)
In re Korean Air Lines Disaster of Sept. 1, 1983, 829 F.2d 1171 (D.C. Cir. 1987) (transferee courts should apply their own circuit’s federal-law precedent)