X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

A Sarasota, Fla., judge dismissed some counts but let stand malpractice and breach of fiduciary duty charges in a lawsuit filed against Holland & Knight by the receiver in a $168 million Ponzi scheme. The rulings by Circuit Judge Rick DeFuria keep alive a suit filed last year by Burton Wiand against the law firm and one of its partners, Scott MacLeod. Wiand of Wiand Guerra King of Tampa was appointed receiver in January 2009 to try to recover funds from indicted Sarasota hedge fund manager Arthur Nadel. Nadel, 77, pleaded guilty last month to 15 counts of operating a Ponzi scheme in Sarasota from 1999 to 2009. In a case that has been compared to Bernard Madoff’s, Nadel’s investors thought they were investing in a variety of hedge funds under Nadel’s control or association. He is awaiting sentencing in a New York prison and faces up to 300 years. Wiand hired the law firm Johnson Pope Bokor Ruppel & Burns of Tampa to sue Holland & Knight for allegedly preparing disclosure documents for investors that failed to mention Nadel was a disbarred New York attorney who had drained a client’s escrow account. The suit also accuses Holland of conflicts of interest for representing Nadel and his investment funds simultaneously. Wiand is seeking up to $168 million from Holland, equal to the amount of the Ponzi loss. A separate class action suit brought by investors is pending in Tampa federal court with motions to dismiss filed by Holland & Knight. Last week, Holland & Knight’s team of lawyers from the Miami law firm of Kenny Nachwalter argued to dismiss the state suit. DeFuria agreed to dismiss counts alleging Holland aided and abetted the fraud but let stand counts alleging malpractice and breach of fiduciary duty. The dismissals were without prejudice, and Wiand said he is considering whether to file amended pleadings on those counts. “The major portion of the case is still in place,” he said. “The case will proceed.” Holland & Knight spokeswoman Olivia Martinez referred calls to the firm’s outside counsel. Attorneys at Kenny Nachwalter declined comment. Previously, Karen McBride, a spokeswoman for Holland & Knight, told The Daily Business Review, “the firm’s position remains unchanged. We’ve done nothing wrong, and we intend to vigorously defend this.” In an unusual twist, DeFuria also verbally agreed to throw out three of the six hedge funds named in the suit, then restored them in a written order issued two days later. The original ruling occurred when, in an offhand remark after the hearing, lawyers for Holland & Knight asked DeFuria whether the judge’s ruling applied to all six of the hedge funds, even the ones over which Nadel had complete control. DeFuria noted he would dismiss those three hedge funds — Scoop Real Estate, Victory Ira Fund and Victory Fund — and thanked Holland’s lawyers for pointing out the distinction. “There was some confusion at the end of the hearing, and the judge indicated he realized he misspoke,” Wiand said. Knocking three of the hedge funds out of the case “would have had some impact on the case, but it still is a very significant case one way or another.” The case is being closely watched in Sarasota, where many of the wealthy, elderly investors live. Wiand rejected any notion that pressure was brought to bear on DeFuria by angry citizens. “I would say that’s absurd,” he said. “I know of no basis of thinking that of any kind. If you read his analysis, you will see he just misspoke at the end. That is nonsense.” No trial date has been set for the case. Asked whether he is negotiating with Holland & Knight, Wiand said, “I wouldn’t tell you even if I was.”

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.