Readers of this securities fraud blog have been exposed to stories showing various ways that a stockbroker might breach their fiduciary duties owed to investors. Today's blog entry illustrates that securities investors have the law on their side when it comes to holding stockbrokers accountable for material misrepresentations and omissions, or actual fraud. According to a released statement, a Miami law firm that advised a convicted Ponzi schemer has agreed to pay a settlement to investors.
Interestingly, the Ponzi schemer's victims did not file the lawsuit. Instead, the bankruptcy trustee overseeing the fraudster's former investment company, Capitol Investments USA, filed the complaint. The trustee alleged that the man's lawyers helped him to operate the scam -- in violation of applicable federal securities laws.
Pursuant to the terms of the settlement, the Ponzi schemer's former legal counsel did not admit to any wrongdoing. Rather, their agreement to pay a $5 million settlement to investment fraud victims was for the stated purpose of avoiding further inconvenience and expense.
Source: miamiherald.com, "Miami law firm agrees to pay $5 million to Nevin Shapiro's investment victims," Jay Weaver, Sept. 10, 2013
