It has been reported that the huge fee requests, in the law firm bankruptcy* associated with the Scott Rothstein Ponzi scheme, in Fort Lauderdale, Florida, will be met with major objections. The bankruptcy trustee, his law firms, and cost reimbursements are alleged to be extremely high, and the issue is whether the award of these fees will result in a less than full recovery for the victims. You may recall that a probable 100% recovery has been announced by some of the creditor attorneys involved in the case. I saw a reference to the fact that $30m on fees are to be requested; this sounds clearly excessive, but the details have not yet been made public.
This is yet another reason to catch suspected Ponzi schemers early on, as any recovery actions, to reimburse the victims, will necessarily be costly. Banks whose customers fall victim to such schemes, and who fail to spot the red flags of Ponzi activity, could lose valuable clients, when their investment capital is impaired, or even wiped out, by such fraudulent schemes. You protect your bank, and your clients, by checking out even the smallest possibility that a Ponzi scheme exists.
*In Re: Rothstein, Rosenfeldt, Adler (Bkcy. SDFL).
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