Coquina Investments v. TD Bank

Summarized by Lynn Hinson , Dean Mead Egerton Bloodworth Capouano & Bozarth PA
11 years 7 months ago

Citation:

11th United States Court of Appeals case number 12-11161 [will be published]

Tag(s):

Ruling:

The United States Court of Appeals for the Eleventh Circuit affirmed the decision of the United States District Court for the Southern District of Florida

Procedural context:

An investment group invested $37,700,000.00 in a Ponzi scheme that was perpetrated by Scott Rothstein, who was a well-known lawyer in South Florida. The investment group sued TD Bank, N.A. for its losses. The case was tried to a jury, which returned a verdict against TD Bank, N.A. for $16,000,000.00 in compensatory damages and $17,500,000.00 in punitive damages. TD Bank appealed the verdict to the United States Court of Appeals for the Eleventh Circuit.

Facts:

A group of investors invested $37,700,000.00 in a Ponzi scheme that was perpetrated by Scott Rothstein, who was a well-known lawyer in South Florida. The investment group lost over $6,700,000.00 in the Ponzi scheme. The group of investors settled with the bankruptcy trustee by agreeing to pay $12,500,00.00 to the bankruptcy estate of the law firm in which the perpetrator of the scheme was a partner. The investor group then sued TD Bank to recover its losses, claiming that the Bank aided and abetted the Ponzi scheme. At trial, it was established that the regional vice president of the Bank prepared and sent "lock letters" which claimed that funds in the firm's trust account could be disbursed only to the investment group. The letters were false, and the perpetrator of the Ponzi scheme was able to and did transfer funds in the account to himself. The "lock" letters were sent by the perpetrator to the investors. The Bank's regional vice president also told the investors that there were millions of dollars in the account, when in fact there was only $100.00 in the account.

Judge(s):

Circuit Judges Anderson and Gilman and District Judge Johnson, sitting by designation.

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