Bank Rejects Ponzi Scheme Responsibility
Citizens Bank may be on the hook for money stockholders lost in a high-profile Ponzi scheme a decade ago.
Yesterday, a state appellate court panel overturned a decision to dismiss a suit against the bank brought by an Asian company that lost $5 million in a suggestion purportedly masterminded by a counsel, Morris M. Goldings.
The court ruled it was too early in the case to ascertain whether the bank could be responsible. But the appellate judges concluded the lawyers previous partners can't be held liable in the case.
Goldings was disbarred after pleading guilty to Fed. charges of scamming his clients and associates.
After 2 successful deals with Goldings, Go-Best Assets Limited, a Hong Kong company, concluded in 2000 to lend $5 million to Goldings to help purchase 170,000 shares in Starwood Hostels and Resorts Inc. Go-Best was guaranteed both interest and some of the profits.
Goldings guaranteed to hold the money in a trust account for clients at Subjects Bank. Goldings later told Go-Best there were not any Starwood shares and the money was gone, according to the ruling. Goldings used the cash to pay other debts.
Go-Best argued that Subjects was negligent, partly because Goldings was chronically overdrawn on the account and the bank had a need to investigate red flags in client trust accounts.
Subjects Bank disagreed the account was not a true trust account and said it did not understand that it was being used as such. Go Best also argued the bank made other missteps, which Subjects denied.
In a partial dissent, one justice related there was no legal basis for ?the imposition of responsibility against Subjects Bank.
Four charged in alleged Ponzi scheme
MIAMI US authorities have charged 4 people with running a Ponzi scheme that bilked 600 Haitian-American speculators out of $6 million.
Federal prosecutors claimed the scheme involved two firms known as Focus Development Center Incorporated. And Focus Money Group. They said selling spiels were made in churches and on Haitian radio stations.
According to the US lawyers office in Miami, the 4 folks sold investors 12-month notes and warranted returns of more than 15 %.
These article is all about finra lawyers and finra arbitration . The author is Alexandora Molavin.