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Investors are asking a Tampa federal judge to reconsider her dismissal of a class action lawsuit filed against Holland & Knight for alleged negligence tied to a Sarasota investment adviser accused of running a $400 million Ponzi scheme. U.S. District Judge Elizabeth Kovachevich ruled the proposed class action filed by six investors against the law firm did not meet the requirements of the Securities Litigation Uniform Standards Act and ordered the case closed March 31. The investors’ lawyer, Guy Burns of Tampa-based Johnson Pope Bokor Ruppel & Burns, followed up with a motion asking Kovachevich to reconsider based on a recent ruling in a similar New York case. That ruling should carve out an exception for some hedge fund lawsuits in federal court even when SLUSA does not apply, Burns said. “The case is directly on point,” he said. “Her opinion did not reference this case. Our belief is she did not pick up that case, so we wanted to direct her attention to it.” If Kovachevich does not change her mind, Burns said a decision will be made on whether to appeal. “The firm is very pleased that the court granted our motion,” said Richard Critchlow of Miami-based Kenny Nachwalter, which represents Holland & Knight in the case. A similar case against Holland & Knight brought by a receiver for Nadel’s companies is moving forward in Sarasota Circuit Court after surviving a motion to dismiss. Burns filed both suits, which accuse the law firm of negligence in its representation of convicted Ponzi schemer Arthur Nadel. Nadel, 77, pleaded guilty in February to 15 counts of operating a $168 million Ponzi scheme in Sarasota from 1999 to 2009. Nadel’s investors thought they were investing in a variety of hedge funds under Nadel’s control or association. He is awaiting sentencing and faces up to 300 years. Burton Wiand of Wiand Guerra King of Tampa was appointed receiver of the Nadel companies in January 2009. The suits accuse Holland of 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 a conflict of interest for representing Nadel and his investment funds simultaneously. About 300 investors could be covered in the class action if it is certified, Burns said. Another 100 investors who turned a profit are subject to lawsuits themselves. The federal ruling should have no effect on the state court case, which is “totally separate,” he said.

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