Lately, it seems like just about anyone can be sued to reclaim money lost in a Ponzi scheme.
The Madoff trustee is going after the fraudster’s family; Madoff victims’ lawyers may go after JPMorgan and other big banks; and prosecutors in the Brooklyn “mini-Madoff” case are seeking claw-backs from unwitting investors.
Now, a case shows there are limits.
NJ Law Journal: Before Bernard Madoff, there was Reed Slatkin, a California investor to the stars, who bilked hundreds of clients out of more than $200 million using a Ponzi-type scheme.
A New Jersey appeals court ruled Tuesday that one of Slatkin’s victims cannot pursue a malpractice claim against his law firm, Bryan Cave, which allegedly helped him conceal the fraud during an SEC investigation.
The Appellate Division, in Azeez v. Bryan Cave , A-5848, said the Atlantic County judge who dismissed the suit did not err in applying the doctrine of forum non conveniens, based in part on his view that a New Jersey fact-finder should not decide whether Bryan Cave conformed to ethics rules in California, where it represented Slatkin.
As the article notes, Plaintiff Michael Azeez sued Bryan Cave to recover $9 million he invested with Slatkin and another $7 million on behalf of his father’s estate. Azeez and his family lost millions more, but the $16 million sought was the amount invested during the time lawyers at Bryan Cave allegedly helped Slatkin avoid detection of his fraudulent scheme in 2001.
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