                            PUBLISHED

UNITED STATES COURT OF APPEALS
                 FOR THE FOURTH CIRCUIT


RICHARD N. MOSEMAN, an                   
individual; DANIEL ROUSSEAU,
                Plaintiffs-Appellants,
                  v.
BLAKE VAN LEER, an individual;
GARNET, INCORPORATED; GARNET OF
VIRGINIA, INCORPORATED, now known
as King George Landfill,
Incorporated; GARNET OF
MARYLAND, INCORPORATED; GARNET
ENTERPRISES, INCORPORATED; CROSS                 No. 00-2072
ROAD TRAIL, INCORPORATED, ROLLINS
AVENUE, INCORPORATED; KING
GEORGE LAND COMPANY,
INCORPORATED; BKJB PARTNERSHIP, a
Georgia corporation; ROBERT D.
CHEELEY, an individual; JAMES E.
BUTLER, JR., an individual; BOBBY
M. THOMAS, an individual; KEITH R.
BREEDLOVE, an individual,
               Defendants-Appellees.
                                         
            Appeal from the United States District Court
             for the District of Maryland, at Baltimore.
               William M. Nickerson, District Judge.
                         (CA-98-434-WMN)
                         Argued: June 4, 2001
                       Decided: August 27, 2001
   Before WILKINSON, Chief Judge, KING, Circuit Judge, and
         Robert R. BEEZER, Senior Circuit Judge of the
       United States Court of Appeals for the Ninth Circuit,
                      sitting by designation.
2                      MOSEMAN v. VAN LEER
Affirmed by published opinion. Senior Judge Beezer wrote the opin-
ion, in which Chief Judge Wilkinson and Judge King joined.


                            COUNSEL

ARGUED: Geoffrey P. Gitner, LAW OFFICES OF GEOFFREY P.
GITNER, Washington, D.C., for Appellants. James Strother Crockett,
Jr., TROUTMAN, SANDERS, MAYS & VALENTINE, L.L.P.,
Richmond, Virginia; Andrew David Levy, BROWN, GOLDSTEIN &
LEVY, L.L.P., Baltimore, Maryland, for Appellees. ON BRIEF: Ste-
phen A. Northup, Robert A. Angle, TROUTMAN, SANDERS,
MAYS & VALENTINE, L.L.P., Richmond, Virginia; Thomas M.
Wood, IV, NEUBERGER, QUINN, GIELEN, RUBIN & GIBBER,
P.A., Baltimore, Maryland; William G. Broaddus, Ronald M. Cherry,
Erik C. Martini, MCGUIRE WOODS, L.L.P., Richmond, Virginia,
for Appellees.


                             OPINION

BEEZER, Senior Circuit Judge:

   Richard Moseman and Daniel Rousseau appeal the district court’s
entry of summary judgment in favor of defendants. Plaintiffs’ claims
are based on common law fraud and on federal and state securities
statutes. We have jurisdiction and we affirm.

   Moseman, Rousseau and defendant Blake Van Leer formed a busi-
ness in the mid-1980s to develop and operate refuse disposal landfill
sites in Maryland and Virginia. To that end, they formed several cor-
porations (the "Garnet corporations"), dividing the common stock of
each company as follows: 50% to Moseman, 25% to Rousseau and
25% to Van Leer. In February 1995, due to the corporations’ financial
difficulties, Moseman, Rousseau and Van Leer transferred 25% of the
issued and outstanding stock in the Garnet corporations to the BKJB
Partnership1 in exchange for a $5 million loan. According to Mose-
    1
   The BKBJ Partnership is an entity formed by defendants Robert D.
Cheeley, James E. Butler, Jr., Bobby M. Thomas and Keith R.
Breedlove.
                        MOSEMAN v. VAN LEER                          3
man and Rousseau, on November 20, 1995, Van Leer informed them
that there was a "problem," that the King George landfill site was
nearly worthless and that BKJB would not provide additional funding
unless Moseman, Rousseau and Van Leer gave up another 40% of
their stock together with executed proxies in favor of BKJB. The 40%
stock interest was transferred. The right to vote the remaining shares
was assigned to BKJB in exchange for another $1 million. These
arrangements were designed to give BKJB 65% of the shares and
100% of the voting rights. The proxy documents were not executed
at that time.

   As the Garnet corporations’ financial condition deteriorated, the
principals sought a new investor or purchaser. Moseman and Rous-
seau allege that, around November 29, 1995, Van Leer and BKJB
adopted a scheme, using "secret information" that the supposedly
worthless King George landfill was actually worth $150 million.

   In December, Van Leer entered into negotiations with an individual
investor, William Blanchet. The agreement Van Leer negotiated pro-
vides: (1) Blanchet with 80% of the stock; (2) Van Leer with 20% of
the stock; (3) Moseman with $1 million cash and a $2.55 million
eight year contingent note; (4) Rousseau with a $2.412 million contin-
gent note, a five year consulting agreement, lifelong health insurance,
and release of a $2 million debt; and (5) BKJB with loan repayment,
$6.376 million in cash, and royalties from the King George landfill.
Moseman and Rousseau assert that Van Leer, BKJB and Blanchet
concealed the fact that Moseman and Rousseau were to receive less
consideration than that received by the remaining parties.

   The Blanchet agreement was never consummated. In January 1996,
before the parties signed the papers, BKJB began to negotiate a more
lucrative agreement with the Sanifill Corporation. As a condition of
providing ongoing financing for the projects, Sanifill required all the
shareholders’ proxies in order to transact corporate affairs. Because
Moseman, Rousseau and Van Leer had not executed the proxies as
promised in November 1995, BKJB insisted that they do so at that
time. Moseman, Rousseau and Van Leer complied. The final agree-
ment with Sanifill resulted in the following provisions: (1) Moseman
received $1 million, a $2.55 million eight year contingent note and
royalties from the (defunct) Rollins and Cross Road landfills; (2)
4                       MOSEMAN v. VAN LEER
Rousseau received a $2.414 million eight year contingent note, satis-
faction of a $2 million debt, a weekly consulting salary and health
insurance; (3) Van Leer received $2 million in cash, repayment of
$675,000 owed him by one of the Garnet corporations and royalties
from the King George landfill; and (4) BKJB received $6 million in
cash, repayment of its loans to the Garnet corporations and royalties
from the King George landfill. Before accepting the proposed agree-
ment, Moseman asked what consideration Van Leer (but not Rous-
seau or BKJB) would receive. Moseman then signed a release of all
claims specifically disclaiming any reliance on representations by any
other party to the transaction. Rousseau signed a materially identical
release after declining to be represented by counsel and stating that
he would be satisfied if he received the same terms under the Sanifill
deal as he would have obtained from Blanchet. He declined to make
any further inquiries with respect to any other parties’ negotiated con-
sideration.

  Several months after the agreement was consummated, Moseman
and Rousseau first learned that the total consideration supporting the
Sanifill transaction was $32 million. This action was initiated against
Van Leer, the Garnet corporations, the BKJB Partnership and individ-
ual defendants Cheeley, Butler, Thomas and Breedlove. Defendants
moved for summary judgment, which the district court granted.

                                   I

   Moseman and Rousseau allege that Van Leer’s representation that
the King George landfill was virtually worthless fraudulently induced
them to dilute their ownership position in the Garnet corporations.
Consequently, according to Moseman and Rousseau, they owned a
smaller percentage interest in the Garnet corporations at the time of
the Sanifill transaction than they would have absent Van Leer’s
alleged fraud. This diminished ownership interest resulted in Mose-
man and Rousseau receiving less consideration from Sanifill than
they believe they should have received. Moseman and Rousseau also
claim that Van Leer fraudulently led them to believe that the total
value of the Sanifill transaction was lower than it actually was, thus
preventing them from negotiating a more lucrative agreement for
themselves.
                         MOSEMAN v. VAN LEER                             5
   The parties dispute whether negligence is the appropriate standard
by which to measure justifiable reliance on Van Leer’s factual repre-
sentations. If the plaintiffs justifiably relied on a misrepresentation,
they may rescind the releases and go forward with their claims. Sny-
der v. Herbert Greenbaum and Assocs., Inc., 380 A.2d 618, 621 (Md.
App. 1977).2

   The district court correctly held Moseman and Rousseau to a negli-
gence, rather than a recklessness, standard in determining the justifi-
ability of their reliance on Van Leer’s statements. A party is justified
in relying on another’s factual assertions unless, "under the circum-
stances, the facts should be apparent to one of his knowledge and
intelligence from a cursory glance or he has discovered something
which should serve as a warning that he is being deceived, that he is
required to make an investigation of his own." Gross v. Sussex Inc.,
630 A.2d 1156, 1166 (Md. 1993). Negligence is the yardstick by
which the Maryland courts measure justifiable reliance. Dep’t of Gen.
Svcs. v. Harmans Assocs. Ltd. P’ship, 633 A.2d 939, 947 (Md. App.
1993) (in claim for equitable adjustment, question was whether reli-
ance on representation with respect to conditions was "reasonable").
If the factual context would prompt a reasonable person to initiate a
further investigation into the details of a proposed agreement, then
failure to inquire would render any reliance unjustifiable and not a
ground to rescind the release.

   The district court also correctly concluded that, under a negligence
standard, neither Moseman nor Rousseau justifiably relied on Van
Leer’s representations. First, both Moseman and Rousseau explicitly
eschewed relying on any such representation when they signed the
releases. Second, Moseman’s attorney admitted in a deposition that he
was suspicious that Van Leer was withholding information, but did
not press further. Third, Moseman and Rousseau failed to inquire fur-
ther of any of the parties to the transaction when full information was
not forthcoming from Van Leer, despite the fact that there were no
impediments to them doing so.
  2
    Maryland law controls the interpretation of the releases in this diver-
sity case.
6                        MOSEMAN v. VAN LEER
                                    II

   Moseman and Rousseau next assert that the releases they signed
are void under federal and state securities laws. See 15 U.S.C.
§ 78cc(a) (2000) ("Any condition, stipulation, or provision binding
any person to waive compliance with any provision of this chapter or
of any rule or regulation thereunder, or of any rule of an exchange
required thereby shall be void."); Md. Code Ann., Corps. & Ass’ns.
§ 11-703(h) (2000) ("Any condition, stipulation, or provision binding
any person acquiring any security or asset or receiving any investment
advice to waive compliance with any provision of this title or any rule
or order under this title is void.").

   Maryland courts examine federal case law when interpreting state
securities statutes which, like section 11-703(h), are worded similarly
to their federal counterparts. Cf. Baker, Watts & Co. v. Miles & Stock-
bridge, 620 A.2d 356, 369-70 (Md. App. 1993) ("In reaching our
decision, we are aided by federal court interpretations of sections of
the federal securities acts that are similar to § 11-703(c).").

   The district court relied on Goodman v. Epstein, 582 F.2d 388 (7th
Cir. 1978), to support its holding that despite the strong language of
15 U.S.C. § 78cc(a), "a release may be valid as to mature, ripened
claims of which the releasing party had knowledge before signing the
release," and that a party would be charged with "knowledge" of those
claims that he or she could have discovered upon "reasonable
inquiry." Moseman and Rousseau argue that the Goodman "reason-
able inquiry" standard is result-oriented and inconsistent with the gen-
eral disfavor in which securities law holds releases. See, e.g., Fox v.
Kane-Miller Corp., 398 F. Supp. 609, 624 (D. Md. 1975), aff’d, 542
F.2d 915 (4th Cir. 1976) (release defense held in "very strong disfa-
vor" in securities cases). Instead, they assert, the district court should
have employed the "actual knowledge" test used by the Ninth Circuit.
See Burgess v. Premier Corp., 727 F.2d 826, 831 (9th Cir. 1984) ("A
release is valid for purposes of federal securities claims only if the
[plaintiffs] had ‘actual knowledge’ that such claims existed.").

  We are not aware of Fourth Circuit or Maryland case law that
addresses the release issue. We conclude that the Goodman "reason-
able inquiry" standard, rather than the Burgess "actual knowledge"
                         MOSEMAN v. VAN LEER                              7
test, sufficiently meets the purposes of the Securities Act when a
release is given as bargained for consideration.

   We note that Burgess relies on Royal Air Properties, Inc. v. Smith,
333 F.2d 568 (9th Cir. 1964). Royal Air does not involve a signed
release at all, but rather an implicit waiver of the right to sue. In fact,
the Royal Air court specifically observes that waiver is "unilaterally
accomplished." Id. at 570. In contrast, the release we consider is
bargained-for. This distinction is dispositive:

      The mere fact that an individual has been asked to sign a
      release should be sufficient to put that individual on notice
      that a reasonable inquiry should be undertaken. No longer
      do we have the innocent investor sitting back and merely
      holding his security; we are not requiring an innocent inves-
      tor continually to question management concerning his
      investment, but only to undertake a "reasonable inquiry"
      prior to taking the affirmative act of signing a release.

        ....

      The requirement that a person exercise reasonable inquiry to
      discover possible matured claims existing at the time of exe-
      cution of a [release] does nothing to defeat the general pol-
      icy against the in futuro waiver of securities claims. Quite
      to the contrary, it insures that the signing of a [release] is
      something that will not be undertaken lightly, with the
      expectation that the [release] will be unenforceable . . .
      because the party executing [it] kept his eyes closed, and
      therefore did not "know."

Goodman, 582 F.2d at 404 (citation omitted) (drawing distinction
between securities fraud cases involving implied waiver or "due dili-
gence" defense and those involving a signed release).3
  3
   See also Petro-Ventures, Inc. v. Takessian, 967 F.2d 1337, 1342 (9th
Cir. 1992) (in case holding that section 78cc(a)’s anti-waiver provision
did not bar release signed in context of ongoing litigation, noting distinc-
tion between unilateral waiver and release which was "the result of nego-
8                       MOSEMAN v. VAN LEER
   The district court correctly concluded that neither Moseman nor
Rousseau conducted a reasonable inquiry with respect to whether they
had claims against Van Leer. Despite the fact that they were asked to
sign releases, neither of them inquired further (whether to Van Leer
or any other party to the transaction) into the total value of the trans-
action, the value of the consideration the others received, or any other
matter. Furthermore, Moseman’s attorney failed to act upon the suspi-
cions that his client was not being treated fairly. Moseman signed the
release anyway. The releases Moseman and Rousseau voluntarily
signed bar their claims.

                                                            AFFIRMED

tiations between parties of equal bargaining power" but explicitly
declining to decide the issue of reasonable inquiry raised in Goodman).
Cf. Jadoff v. Gleason, 140 F.R.D. 330, 333-34 (M.D.N.C. 1991) (citing
Goodman and American Gen. Ins. Co. v. Equitable Gen. Corp., 493
F.Supp. 721, 751 (E.D. Va. 1980), for the "reasonable discovery" stan-
dard, but voiding release because the document in question "stated only
a belief as to the receipt of information" and therefore would not have
put the plaintiff on notice to inquire).
