Law firms DLA Piper and Fox Rothschild LLP have been sued in California federal court under allegations that one of their lawyers helped perpetuate a $170 million Ponzi scheme involving a Florida real estate company.
The court-appointed receiver has stated that the lawyer was either grossly negligent or a willing participant in the illicit sale of securities offered by EquiAlt LLC — an entity that was sued by the U.S. Securities and Exchange Commission (SEC) for purportedly operating as a massive Ponzi scheme.
Complaint Alleges Lawyer Knowingly Assisted in Ponzi Scheme
According to the complaint, the lawyer represented EquiAlt while working at Fox Rothschild, before moving over to DLA Piper. The complaint also alleges that the lawyer prepared inadequate security disclosure and compliance materials, helped operate an illegal sales program, and consequently helped EquiAlt and its officers carry out the Ponzi scheme.
Based on reports released by SEC, Brian Davison (the CEO of the Tampa real estate firm) and Barry Rybicki (EquiAlt's managing director) had misused roughly $85 million raised from investors and made Ponzi payments to cover the fraud. The duo supposedly ran the scheme from 2010 until fall 2019 and spent the money on luxury cars, chartered flights, and other luxury items.
In July, several investors sued the lawyer, DLA Piper, and Fox Rothschild in the Middle District of Florida, stating that the attorney knew that EquiAlt securities were being sold to non-accredited investors, that the company was promoting unregistered securities, and that it was paying commissions to unlicensed sales representatives.
The investors also stated that the attorney wrongly assured EquiAlt's unlicensed sales agents that the organization complied with securities laws, notwithstanding that the EquiAlt securities were not exempt from necessary registration.
Speak with a Ponzi Scheme Attorney
Dimond Kaplan & Rothstein, P.A. has vast experience with cases related to securities fraud. The firm has successfully represented numerous securities fraud victims and we will aggressively pursue claims to recover your losses.
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