Help me, ATOT lawyers. You're my only hope.

NuclearNed

Raconteur
May 18, 2001
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344
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A while back, my elderly parents' investment firm encouraged them to invest a large amount of money into what turned out to be a Ponzi scheme.

http://www.investmentnews.com/artic...ve-unlicensed-salespeople-in-woodbridge-ponzi

The amount of money my parents put in was a large chunk of their life savings. My sister & I are going to talk to my Dad tomorrow night & try to help him salvage as much as possible out of this mess, but we're not sure where to start. My Dad is convinced that the government is going to fix everything, but to say the least I'm very skeptical. I think he thinks that he has it under control and that my sister & I are intruding on his business.

1a. should he get a lawyer, or just let the SEC handle everything? Just to be clear - he has already been contacted by the SEC & given a bunch of forms in order to file a claim.
1b. There seem to be a bunch of existing lawsuits, so should he jump on one? If so, how do we pick one?
2. We're going to strongly encourage him to change investment firms. That's the right thing to do, right?
3. does the investment firm that recommended this "investment" bear any responsibility or liability?

There are probably other questions, but I can't think clearly at the moment. This thing makes me alternately sick to my stomach / insanely angry.
 
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whm1974

Diamond Member
Jul 24, 2016
9,436
1,568
126
1a. I would definitely get a lawyer. He should help with the forms if nothing else.
2. Yes I would do that. A decent investment firm should be aware of Pozi schemes and when someone is trying pull one on them as well.
3. Don't know, something to ask the lawyer.

You dad is fortunate that he only invested a large chuck and not his entire live savings.
 

DigDog

Lifer
Jun 3, 2011
14,081
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3. Probably not.

Still, ask the lawyer - you never know.


Financial Advisors is basically non regulated, anyone can call himself that, however local laws might be different.
 

Jeeebus

Diamond Member
Aug 29, 2006
9,181
901
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1. The government generally doesn't do shit to recover money for the victims. The SEC and USAO's primary goal is to put someone in jail or obtain some pecuniary relief against the wrongdoer (such as a lifetime bar from being an officer of a public company).
2. Maybe? Depends on what was said and how they got your parents into this investment in the first place.
3. Same as #2. There's no easy answer. What disclosures were they given up front? What did the investment firm say to them? What evidence is there that anything was said? Do they have any written agreements with the investment firm? There could absolutely be liability and an ongoing business (such as the investment firm) is a hell of a better source for recovering money than the company running the scam (which is presumably shut down). I've done a few ponzi scheme cases over the years - most of them result in jail but little (if any) recovery for the victims. Money comes to the victims from those that aided in the fraud or were otherwise negligent in dealing with the victims. Could be an investment firm, a bank, etc. For example, here in South Florida, TD Bank got tagged for around $50 million for its role in Scott Rothstein's scheme. TD Bank paid the judgment.