06 August 2012

Firm slapped over Ponzi scheme evidence

A federal judge has sanctioned Miami-based law firm Greenberg Traurig and client TD Bank after 'wilfully' mishandling evidence in a Ponzi scheme case earlier this year.

The judge reckoned this chap was in charge of the litigation

The judge reckoned this chap was in charge of the litigation

Miami federal judge Marcia Cooke said the firm and the bank engaged in a ‘pattern of discovery violations’ during the case of convicted Ponzi scheme organiser Scott Rothstein, as they failed to turn over evidence to investors involved in the $67 million civil judgment.

'Clouseau-like' litigation

According to the Miami Herald newspaper, in her 30-page ruling Judge Cooke did not issue sanctions against any individual Greenberg lawyers, instead she ordered the firm and its client to pay post-judgment legal fees for the Coquina Investments Group’s lawyer.
The judge added: ‘It often times appears that this litigation was conducted in an Inspector Clouseau-like fashion. However, unlike a Pink Panther film, there was nothing amusing about this conduct, and it did not conclude neatly.’
The Coquina Group’s lawyer -- Chicago-based David Mendal – had pushed for harsher sanctions, including contempt. Although the judge did not go that far, she found that Toronto-based TD Bank had ‘actual knowledge’ of the scheme, possibly bolstering a future case.
Mr Mandel said: ‘We are extremely pleased that Judge Cooke recognised the bank’s misconduct for what it was, wilful and in bad faith. The implications of the court’s factual findings and legal conclusions will be far reaching.’

50-year sentence

Disbarred lawyer Rothstein -- co-founder of the now-defunct Fort Lauderdale- based firm Rothstein Rosenfeldt & Adler -- is currently serving a 50-year sentence after laundering millions of dollars in his law firm’s accounts kept at the bank.
TD spokeswoman Maria Leung told the publication Businessweek that the bank will continue to defend itself: ‘TD Bank respectfully disagrees with the court’s order and will appeal it and the underlying jury verdict at the appropriate time. We do not believe that the record before the court supports the findings that were made regarding wilfulness or the sanctions that were imposed.’
Meanwhile, Greenberg Traurig spokeswoman Lourdes Brezo Martinez said: ‘We will comply with Judge Cooke’s ruling. We regret the deficiencies that gave rise to this order.'

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