by Brian Mahany
One of the more frequent questions asked of us is, “Why should we sue our broker?” Many clients believe that it is easier to wait for a court appointed receiver to collect their money, or worse, participate in a class action suit. On paper, these remedies seem great. Unfortunately, the recovery is usually quite small.
Class actions lawyers and court appointed receivers generally go after the bankrupt entity or person who committed the fraud. Irving Picard, the court appointed receiver in the Madoff case, has been charged with gathering up Madoff’s assets – boats, houses and cars – and liquidating them. He also brought suit against some of the lucky early investors who got back their money. These suits, called clawback actions, seek to recover the false profits paid to the early investors.
It has been over two years since the Madoff scandal was uncovered and Picard has yet to make any distribution to the victims. Meanwhile, his fees have already topped $3 million. In a letter to Congress, Picard’s fees are estimated to be approximately $16 million by the time the case is over. Meanwhile, investors have not received a dime.
Picard is one the best receivers in the business. Thus far he has filed over 1000 lawsuits trying to recover as much money as possible for the victims. Class action lawyers frequently settle for far less.
Whereas receivers and class action lawyers generally sue the people perpetuating the fraud, they rarely sue the stockbrokers and investment advisers who steered individual clients into these bad investments. Skilled securities attorneys can often help a client recover more of his or her loss by filing claims against the broker who put their clients into these Ponzi schemes and frauds.
While Picard hopes to pay Madoff victims a whopping 4 cents on the dollar this year, a family trust just successfully arbitrated claims against Stone & Youngberg, a San Francisco financial services firm. The family won a $750,000 award against the firm after a Financial Industry Regulatory Authority (FINRA) arbitration panel ruled that the firm failed to exercise proper diligence in recommending the Madoff investment.
Most securities lawyers do not charge for their legal fees unless they successfully recover money for their clients. It makes sense, then, for people who lost their money to a Ponzi scheme or fraud to meet with a qualified stockbroker fraud lawyer. Let a professional help you weigh your various options. Sometimes you can participate in both a class action lawsuit against a promoter and an arbitration action against the broker dealer.
Mahany & Ertl, LLC is a full service boutique law firm that concentrates in fraud recovery – FINRA arbitrations, stockbroker fraud, Ponzi schemes, investment fraud and professional malpractice; our asset recovery lawyers can help you get back your hard earned money. Often we can handle your case on a contingent fee basis meaning you don’t pay for legal fees unless we win your case and collect your money.
Call Brian Mahany at (414) 704-6731 for a no obligation, no nonsense consultation. Services provided nationwide from our offices in Milwaukee, Wisconsin; Detroit, Michigan and Portland, Maine.