Ponzi Perspectives

Analysis, Impact, and Outlook on Ponzi Scheme Litigation

Peters v. Gallun, et al. was filed in the Central District of California on February 18, 2021, claiming civil damages for violations of securities law, breach of contract, and conversion. Plaintiff is an individual working as a movie producer in California (“Peters”).  The defendants are an individual acting as a business manager and equine sales agent (“Gallun”) and Gallun’s limited liability company.…
Ebury Street Capital, LLC, et al. v. McOsker, et al. was filed in the United States District Court for the District of Delaware on February 12, 2021, claiming civil damages for an alleged $3.5  million Ponzi scheme perpetrated by the defendants. Plaintiffs are entities in the business of buying tax lien certificates, and defendants are individuals and entities who purported to be legitimate brokers and market-makers for the selling and trading of tax lien certificates.…
Mar v. Mohr, et al. was filed in a California state court on February 11, 2021 as a putative class action for $170 million in civil damages against alleged co-conspirators of a retirement planning fraudster’s business.  Specifically, the complaint alleges violations of California securities law, fraud and deceit, intentional misrepresentation, and negligent misrepresentation. The named plaintiff is an individual investor who seeks to represent two classes amounting to over 100 other investors.  The defendants include…
Atkins Investment Partnership, et al. v. EisnerAmper, LLP, et al. was filed in the Northern District of California on February 8, 2021, claiming civil damages from an auditor that allegedly aided and abetted its client’s Ponzi scheme by providing false audits. Specifically, the complaint alleges negligent misrepresentation, common law fraud, aiding and abetting fraud, aiding and abetting breach of fiduciary duty, and aiding and abetting securities fraud in violation of California Corporations Code section 25403.…
SEC v. GPB Capital Holdings, LLC, et al. was filed in the Eastern District of New York on February 4, 2021 by the SEC, alleging violations of federal law in connection with the defendants’ investment business, which allegedly raised over $1.7 billion from more than 17,000 investors. Specifically, the complaint alleges that the defendants violated the Investment Advisers Act, the Securities Act, and the Exchange Act, along with corresponding regulations.…
February 3, 2021 – Rotstain v. Mendez, 2021 WL 359989 (5th Cir.) On February 3, 2021, the United States Court of Appeals for the Fifth Circuit issued an opinion in Rotstain v. Mendez, holding in part that a receiver had standing to bring claims on behalf of investors in connection with a Ponzi scheme. In the context of denying a motion to intervene, Rotstain clarified that receivers and their assignees have standing to bring claims…
November 13. 2020 – Heinert v. Bank of America, N.A., 2020 WL 6689287 (2d Cir.) On November 13, 2020, the United States Court of Appeals for the Second Circuit issued an opinion in Heinert v. Bank of America, N.A. imposing a heavy pleading burden upon plaintiffs seeking to sue banks for the facilitation of a Ponzi scheme. As the recession deepens, Ponzi schemes that benefitted from a thriving pre-pandemic economy are likely to collapse. While…
June 1, 2020 – Isaiah v. JPMorgan Chase Bank, N.A., 960 F.3d 1296 (11th Cir.) On June 1, 2020, the U.S. Court of Appeals for the 11th Circuit issued Isaiah v. JPMorgan Chase Bank, N.A., a precedential opinion that draws sharp limits on court-appointed receivers’ ability to bring claims against financial institutions that provided banking services to customers later discovered to be running a Ponzi scheme. As the economy transitions from its nearly decade-long bull…