A judge dismissed part of a civil case filed against an accounting firm that worked for Rothstein Rosenfeldt Adler before the Fort Lauderdale, Fla., law firm collapsed under the weight of a $1.2 billion fraud engineered by its chairman.
But Broward Circuit Judge Jeffrey Streitfeld said Friday that he will allow investor attorney William Scherer to re-file claims of breach of fiduciary duty, aiding and abetting a breach of fiduciary duty and aiding and abetting conversion representing a total of nine counts if he offers more evidence to support the allegations against Berenfeld Spritzer Schecter & Sheer.
The lawsuit claims the accounting firm is liable for the loss of more than $100 million the plaintiffs lost in convicted fraudster Scott Rothstein's settlement scheme, contending the accountants should have been aware Rothstein was running a scam and may have participated in it.
In all, Berenfeld faced 19 counts in the civil suit that also names disbarred attorney Rothstein, others at the firm, TD Bank and alleged feeder funds.
The accounting firm has rejected the suit as a smear campaign. Berenfeld says it performed tax work at the law firm but denies auditing its books and denies any knowledge of the fraud Rothstein admitted in court.
Streitfeld also dropped claims against former RRA general counsel David Boden of fraudulent misrepresentation, negligent misrepresentation, aiding and abetting a breach of fiduciary duty, and aiding and abetting conversion.
Boden still faces counts of civil conspiracy, and aiding and abetting a fraud. The investors also will be allowed to re-file the claims if they are amended.
Scherer of Conrad & Scherer represents investors who claim they lost $100 million before the scheme tied to settlement funding was uncovered late last year.
A number of other defendants in the case will argue their dismissal motions March 5. An amended complaint is likely to follow based on Streitfeld's decisions.
Fort Lauderdale attorney Bruce Rogow, who argued on behalf of the investors, said more facts have come out since the latest version of the complaint was filed Nov. 25.
"What [Streitfeld] is saying is, 'You need to do a little better on these counts,' and so we can do better," Rogow said.
Berenfeld attorney Jane Moscowitz and Boden attorney Todd Payne declined to comment.