Prysm Group Faces Setback as Court Dismisses Tort Claims in Emeritus Case
On Wednesday, July 2, 2025, the United States District Court for the Southern District of New York partially dismissed a lawsuit filed by Prysm Group, LLC against Emeritus Institute of Management PTE Ltd. and Emeritus Institute of Management, Inc. The ruling, issued by U.S. District Judge Victor Marrero, dismissed seven tort claims in the amended complaint without prejudice, leaving the breach of contract claim intact.
Prysm Group, a consulting firm specializing in online educational and professional programs, including blockchain-related courses, for universities worldwide, initiated the lawsuit on December 6, 2024, alleging that Emeritus Singapore and Emeritus U.S., subsidiaries of Eruditus Learning Solutions Pte Ltd., violated a nondisclosure agreement (NDA). The dispute arose from a potential business transaction in 2022, during which Prysm explored acquisition or investment opportunities with the assistance of investment bank D.A. Davidson & Co.
In August 2022, Prysm prepared a confidential information presentation (CIP) containing sensitive details about its business model, financials, competitive strategies, client details, and growth prospects, including its blockchain education initiatives. The CIP was shared with potential investors and acquirers, including Emeritus, after they signed an NDA. On October 27, 2022, a virtual meeting took place where D.A. Davidson presented a condensed version of the CIP to Emeritus employees Subham Bansal, Siddharth Taparia, and Prajal Kumar. The full CIP was later emailed to the attendees and another Emeritus U.S. employee, Charles Schilling.
Prysm alleged that Emeritus U.S. employee Mike Malefakis shared the CIP with the University of Pennsylvania’s Wharton School, with whom both Prysm and Emeritus had separate partnerships for online educational programs, including blockchain courses. This disclosure came to light during discovery in a related case in the Eastern District of Pennsylvania in December 2023. Prysm claimed that the shared CIP was used by Wharton to dispute an $8.5 million invoice for services rendered between October 2021 and December 2022.
The amended complaint, filed after pre-motion letters clarified the distinct legal entities of Emeritus Singapore and Emeritus U.S., included eight causes of action: breach of contract, tortious interference with the NDA, tortious interference with Prysm’s Wharton contract, civil conspiracy, fraudulent inducement, fraudulent concealment, conversion, and misappropriation of trade secrets. Prysm alleged that Emeritus misused its blockchain course materials, among others, claiming it could no longer use these materials commercially. These tort claims were pleaded in the alternative, should the court not find Emeritus Singapore and Emeritus U.S. to be alter egos.
Judge Marrero dismissed the tort claims for failing to meet pleading standards. The court found that Prysm did not sufficiently allege that Emeritus U.S. intentionally caused Emeritus Singapore to breach the NDA or that an actual breach occurred, as the NDA did not mandate investment or acquisition. The tortious interference claim with the Wharton contract was dismissed, as evidence showed Wharton’s intent to dispute Prysm’s fees predated the CIP disclosure.
Fraud claims were dismissed for lacking specificity under Federal Rule of Civil Procedure 9(b), failing to identify specific misleading statements or fraudulent intent. The conversion and misappropriation claims, including those related to blockchain course materials, were dismissed due to vague allegations and insufficient evidence that the materials constituted trade secrets or were used by Emeritus. The civil conspiracy claim was dismissed, as it relied on the other dismissed tort claims.
The case continues on the breach of contract claim, with the dismissed claims potentially subject to refiling if Prysm addresses the deficiencies noted by the court.
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