Faridani v. McKenna Capital LLC
1:24-cv-08030
N.D. Ill.Sep 24, 2025Background
- Faridani invested significant capital in a crypto mining venture marketed by McKenna Capital defendants.
- Faridani alleges a scheme of misleading representations solicited more investment.
- Relief Defendants Emily and Jillian McKenna are alleged to have received ill-gotten funds.
- Defendants move to dismiss under Rule 12(b)(6) and 9(b); Relief Defendants move under 12(b)(1) and 12(b)(6).
- Court grants in part and denies in part McKenna Defendants’ motion; denies Relief Defendants’ motion; orders discovery supervision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for Counts I, II, and V | Faridani has standing under 10(b) and Illinois securities claims. | Defendants contend lack of adequate connection/standing. | Faridani has standing; Counts I, II, and V survive. |
| Rule 9(b) specificity for fraud counts | Faridani pleaded who, what, where, how of misrepresentations. | McKenna argues insufficient specificity. | Counts I, II, III, and V survive Rule 9(b) pleading requirements. |
| Breach of contract sufficiency (Count IV) | PMMs govern agreements; breach alleged. | Attachment not required; insufficiency argued. | Count IV adequately stated and survives. |
| Negligent misrepresentation duplicative (Count VI) | Unjust enrichment/contract basis supports claim. | Duplicative of Count IV; improper. | Count VI dismissed as duplicative. |
| Relief Defendants’ subject-matter jurisdiction and claims | Ill-gotten funds received; relief defendants connected to funds. | Lack of relationship/connection; insufficient pleading. | Relief Defendants’ motion to dismiss denied; jurisdiction over relief defendants recognized. |
Key Cases Cited
- Gurary v. Winehouse, 235 F.3d 792 (2d Cir. 2000) (claims may be pled with short and plain facts without full-scale detail of dates or amounts)
- DH2, Inc. v. Athanassiades, 359 F. Supp. 2d 708 (N.D. Ill. 2005) (connection requirement for securities fraud claims; pleading standards)
- Uni*Quality, Inc. v. Infotronx, Inc., 974 F.2d 918 (7th Cir. 1992) (fraud pleadings require who, what, when, where, how)
- Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreens Co., 631 F.3d 436 (7th Cir. 2011) (Rule 9(b) heightened pleading for fraud; Illinois Consumer Fraud Act cases)
- Judson Atkinson Candies, Inc. v. Latini-Hohberger Dhimantec, 237 F.R.D. 173 (N.D. Ill. 2006) (Rule 9(b) sufficiency; not all details required)