30 August 2012

Firm shells out $25m for Ponzi settlement

Anyone for a flutter on the Ponzi?

International law firm Holland & Knight has agreed to pay £25 million to settle a claim from investors who lost money through convicted Ponzi scheme runner Arthur Nadal.

The decentralised firm -- which has origins in Florida -- did not admit wrongdoing, but in a statement general counsel Michael Chapman said: ‘The settlement represents a compromise by the firm that reflects its consideration of various factors, including the substantial costs and investment of firm resources required to continue the litigation involving the funds.’

Fraudulent scheme

The ABA Journal reports that the settlement provides the largest source of money to those defrauded by the scheme, which saw Nadel – who died in prison in April – rake in $162m.
According to reports, the firm earned less than $500,000 for the work it carried out of behalf of Nadel. However, the receiver’s suit claimed the firm failed to notice that Nadel – a former lawyer – had been disbarred for taking client money out of trust accounts. The firm was also accused of failing to discover the fraudulent scheme.

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