Lawyers Guilty in Ponzi Scheme
The Daily Report is reporting that Bilked investor balks at [law] firm's deal in the Mobile Billboards of America.
"Paul, Hastings, Janofsky & Walker has asked an Atlanta federal judge to approve a settlement of a case alleging that some of the firm's Los Angeles lawyers helped clients sell investments in roving billboards that they should have realized was a scam.The settlement filed with the court is still under seal, but a letter from an investor to U.S. District Judge Charles A. Pannell Jr. of the Northern District of Georgia hints it may top $4 million.
The investor complained that it's a poor deal for those who lost money, especially when Troutman Sanders lawyers who brought the suit on behalf of the billboard companies' court-appointed receiver would get one-third as their fee."
So how much are the investors going to get out of this settlement?
"Although the investors are no longer plaintiffs and the case was never certified as a class action, the investor's letter indicates that investors can expect to receive money under the deal—apparently through the receiver.The letter says that under the proposal “we receive ten cents on a dollar.
The letter doesn't give a dollar figure, but the complaint against the law firm says that the purchases of the billboard investments exceed $60 million and that the Mobile Billboards entities are obligated to repurchase billboard investments and make refunds in excess of $40 million to investors who purchased the billboards after the entities engaged Paul Hastings.
A deal of 10 percent suggests that Paul Hastings -which has announced that in 2007 it grossed $976 million, with equity partners taking home on average $1.92 million each-would pay at least $4 million."
This was the securities version of a business opportunities fraud. It was actually very simple to diagnosis as a fraud - for any experienced attorney.
Here is what the investors should be asking themselves: why didn't they form a group, prior to investing, and getting good due diligence advice?
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