In a major $250 million international investment fraud receivership, PSD convinced a federal judge that the SEC needs to reassess its receivership processes. PSD represents a Swiss entity that is the largest victim of the Ponzi scheme. After uncovering the fraud, PSD investment fraud attorneys brought a fraud case against the perpetrators, followed by the fraudsters going to jail and their businesses placed into a receivership established by the SEC. PSD led objections against excessive professional services fees in the receivership, resulting in a savings of more than $6 million that benefits investor victims.
The NY Law Journal reported:
“Throughout the receivership action, the SEC took positions that favored professional service providers over victims,” said investor’s counsel Barry Pollack, a partner with Pollack Solomon Duffy in Boston. “We insist that the SEC improve its process for commencing receiverships, for identifying appropriate professionals, and for establishing reasonable and fair rates of compensation.”
The federal judge agreed, explaining that the “situation cries out for a discussion with the SEC in advance about a budget.”
The SEC issued a statement claiming that it generally takes “great care to monitor all receiverships and carefully scrutinize fees and expenses to ensure that they are reasonable to the work performed, and to provide our recommendation to the court based on that thorough review.”
In the Wextrust matter, however, the SEC supported the initial bills that the judge found unreasonable. The receiver did not return calls from the NY Law Journal for comment.
PSD blasted the SEC in a letter to SEC chair Mary Jo White, criticizing the agency’s receivership processes.
- The Team
- Practice Areas