Law firm Holland & Knight LLP will pay $25 million for allegedly neglecting to report the shady activities of Ponzi schemer Arthur Nadel, the Herald-Tribune reported.If the court approves the deal, the settlement will be the largest for Nadel’s investors in more than three years—totaling $18.2 million after legal fees are paid.
Nadel, dubbed a “mini Madoff,” defrauded his investors of $168 million over 10 years. He died earlier this year at age 80 while serving a 14-year sentence at the same federal prison as Bernard Madoff himself.
Holland & Knight, which represented Nadel’s funds and fund managers between 2002 and 2009, was accused of knowing about the illicit activity at its client’s hedge funds in downtown Sarasota.
“This may be less than some were hoping for, but is still a significant win for the investors,” attorney Morgan Bentley, counsel for a number of the investors, told the Herald-Tribune.
The firm maintained that its conduct was in no way inappropriate and “that it did not fail to comply with its duties and obligations,” The Wall Street Journal’s Law Blog reported.
Investors are also hoping to get another $20 million back following this case—bringing their recovered sum to 30 per cent, the Herald-Tribune wrote.
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