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Ponzi Scheme Breach of Duty

A&O Shearman

Eighth Circuit Reverses Jury Verdict For Aiding And Abetting Ponzi Scheme, Holding That In Pari Delicto Defense Barred Bankruptcy...

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On September 12, 2024, the United States Court of Appeals for the Eighth Circuit reversed a trial court decision that had rejected a bank’s assertion of the in pari delicto defense to aiding and abetting claims brought by the...more

Marshall Dennehey

Broker-Dealer Found Grossly Negligent for Employees’ Ponzi Scheme Operated Out of Its Offices

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A group of investors alleged causes of action, including breach of fiduciary duty and respondeat superior, against the broker-dealer for its failure to supervise four of its employees who operated a Ponzi scheme out of the...more

King & Spalding

Allegations Against Lender for Aiding and Abetting Ponzi Scheme Partially Survive the Lender’s Motion for Summary Judgment

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On March 23, 2023, the U.S. Bankruptcy Court for the Southern District of Florida partially denied summary judgment to Deutsche Bank on, among others, claims for aiding and abetting conversion and breach of fiduciary duty,...more

McGuireWoods LLP

Notable Litigation – February 2023

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Notable litigation filed during February 2023 includes: (1) Tell v. Modica Microindustries, Inc. and (2) Pelham v. VBit Technologies Corp., et al....more

King & Spalding

Fifth Circuit Finds That New Jersey’s Discovery Rule Applies If Identity of a Specific Defendant Was Not Known Until After the...

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On December 15, 2022, the U.S. Court of Appeals for the Fifth Circuit reversed the pleading-stage dismissal, as time-barred, of a case against Bank of New York Mellon by defrauded investors in the Allen Stanford Ponzi scheme....more

McGuireWoods LLP

New Complaint – Damian, as Receiver of Today’s Growth Consultant, Inc. v. SmithAmundsen, LLC

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On May 27, 2022, Plaintiff Melanie E. Damian, in her capacity as the Court-Appointed Receiver for Today’s Growth Consultant, Inc. d/b/a The Income Store (“TGC”) (the “Receiver”) filed a complaint against Defendant...more

Winstead PC

Federal Court Denies Defendant Banks’ Motion For Summary Judgment On Plaintiffs’ Knowing Participation In Breach Of Fiduciary Duty...

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In Rotstain v. Trustmark Nat’l Bank, plaintiffs sued banks for assisting Stanford and his entities regarding a Ponzi scheme. No. 3:09-CV-2384-N, 2022 U.S. Dist. LEXIS 10332 (N.D. Tex. January 20, 2022). ...more

Goodwin

Eleventh Circuit Overturns Dismissal of Cryptocurrency Ponzi Scheme Class Action Suit

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IN THIS ISSUE - Eleventh Circuit Overturns Dismissal of Cryptocurrency Ponzi Scheme Class Action Suit; Federal Court of Appeals Dismisses Leading Fannie Mae and Freddie Mac Shareholder Lawsuits; NY Seeks Blockchain...more

McGuireWoods LLP

New Complaint – Tu Le et al. v. Prestige Community Credit Union

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Tu Le et al. v. Prestige Community Credit Union, filed in the United States District Court for the Central District of California on February 18, 2022, is the second putative class action filed in connection with a...more

McGuireWoods LLP

New Complaint – DeCoster v. One Seven d/b/a We Are One Seven, LLC

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DeCoster v. One Seven d/b/a We Are One Seven, J Wellington Financial, LLC, and Jason Jodway was filed in the Circuit Court for the County of Macomb, Michigan on January 28, 2022, seeking damages and equitable relief along...more

McGuireWoods LLP

New Complaint – Fiene v. Schweinzger

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Christian Fiene and Erik Kiser v. Matthew Schweinzger was filed in the Northern District of Illinois on October 27, 2021, seeking damages of more than $500,000 for state statutory and common law claims related to the...more

McGuireWoods LLP

New Complaint – Sedlar-Sholty, et al. v. Acclivity West, LLC, et al.

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Sedlar-Sholty, et al. v. Acclivity West, LLC, et al. was filed in the Superior Court of the State of California, County of Los Angeles on July 19, 2021 seeking damages for negligence, breach of fiduciary duty, and negligent...more

McGuireWoods LLP

Minnesota Court Untangles Who Owns What Claim in the Fallout of a Ponzi Scheme

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The collapse of a Ponzi scheme usually follows a familiar pattern. When the scheme is exposed, the company created by the schemer—which is usually little more than a sham entity—is placed into receivership or declares...more

McGlinchey Stafford

SEC’s 2021 Examination Priorities Focus On Fintechs And Sustainability

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In March, the Securities and Exchange Commission (SEC)’s Division of Examinations announced its 2021 examination priorities. The SEC has committed to focusing its investigations on, among other issues, “attendant risks...more

Skadden, Arps, Slate, Meagher & Flom LLP

Inside the Courts – An Update From Skadden Securities Litigators - March 2021

This quarter’s issue includes summaries and associated court opinions of selected cases principally decided between November 2020 and January 2021. Derivative Litigation - Second Circuit Reverses Summary Judgment...more

Goodwin

Ninth Circuit Holds Loss Causation May Be Predicated on Information Potentially Available Under Freedom of Information Act

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Ninth Circuit Holds Loss Causation May Be Predicated on Information Potentially Available Under Freedom of Information Act; D.C. Circuit Upholds FINRA’s Permanent Ban of Broker Accused of Misconduct After Finding SCOTUS...more

Winstead PC

A Rose By Any Other Name Would Not Smell As Sweet: Court Holds That Texas Does Not Have An Aiding And Abetting Breach Of Fiduciary...

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In Hampton v. Equity Trust Co., an individual sold fraudulent investments to the plaintiff. No. 03-19-00401-CV, 2020 Tex. App. LEXIS 5674 (Tex. App.—Austin July 23, 2020, no pet.)....more

White & Case LLP

National Bank Trust v Ilya Yurov: "a Ponzi scheme with a fancy name" – Proving Fraud in the English Courts

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National Bank Trust v Ilya Yurov & Ors [2020] EWHC 100 (Comm) provides a useful insight to the English Court's approach to pleading and evidencing fraud, emphasising the importance of properly particularised claims and...more

Kramer Levin Naftalis & Frankel LLP

Fifth Circuit Affirms Bar Orders in Receivership, Bars Creditors From Pursuing Claims Against Settling Defendants

In a 2-1 opinion dated July 22, 2019, the Fifth Circuit held that third parties who paid a receiver to settle estate claims against them are entitled to an order barring other creditors from suing the settling third parties...more

Patterson Belknap Webb & Tyler LLP

Fifth Circuit Considers Nonconsensual Third-Party Releases Outside of Bankruptcy

We’ve focused a lot on third-party releases lately, as bankruptcy courts across the country continue to evaluate whether and under what circumstances they are permissible. But, as a recent opinion of the United States Court...more

Bennett Jones LLP

US $2.6-Billion Fraud Judgment Awarded Against Former Sino-Forest CEO

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On March 14, 2018, the Honourable Justice Penny of the Ontario Superior Court (Commercial List Division) released a decision granting a US$2.6-billion judgment to the SFC Litigation Trust for fraud and breach of fiduciary...more

Dorsey & Whitney LLP

This Week In Securities Litigation

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The SEC filed one new action this week – an administrative proceeding involving the principal of an investment adviser and undisclosed conflicts of interest. The Commission also amended a complaint in an insider trading...more

Spilman Thomas & Battle, PLLC

Bank Liability to Non-Customers in a Ponzi Scheme

The morning news reports flashes a report that your customer was actually a Ponzi scheme and defrauded numerous people. Of course, this is terrible news for the innocent victims, but, you ask yourself, could my bank be...more

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