Hall v. Morgan Stanley Dean Witter, et. al. ⇒ $1.76 million

The Law Offices of Cary S. Lapidus obtained an arbitration award of $1.76 million for clients who sustained losses in a complex investment known as a Prepaid Variable Forward Contract. The clients also alleged the recommendation of unsuitable investments in their stock portfolio.

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“Cary Lapidus is probably the most well prepared attorney with whom I have ever dealt. He has excellent judgment and understanding of the law. Most important of all, he is highly ethical and those who deal with him know that his word is his bond.“
Paul Dubow
Opposing Counsel & Mediator in Six Cases


In The News

BERNARD MADOFF CASE: BROKER MUST REPAY S.F. COUPLE
A Madoff-related Case
Andrew S. Ross
San Francisco Chronicle
December 19, 2010

A happier holiday season than perhaps expected for Lenore and Charles Bleadon.
The San Francisco couple are getting back $750,000 in savings that had gone down Bernard Madoff's rat hole.
Actually, the money, awarded by an arbitration panel last week, is being billed to a San Francisco brokerage, Stone & Youngberg, in what may be the first judgment of its kind in the Madoff affair.
Here's how it happened: Lenore Bleadon, 70, had inherited the money from her late father in 2005, placed it in a family trust, and had Stone & Youngberg, with whom her father had a long relationship, invest it, mostly in safe municipal bonds.
In 2007, according to a filing with the arbitration panel, the couple were advised to place the money with a Seattle money management outfit, FutureSelect Portfolio Management. Unbeknownst to Lenore and Charles Bleadon, 72, according to the filing, almost all the money found its way from FutureSelect into a Madoff ''feeder fund,'' Tremont Group Holdings, thence to Madoff Investment Securities. You know the rest.
In a claim filed with the Financial Industry Regulatory Authority the Bleadons' San Francisco attorney, Cary Lapidus, charged that Stone & Youngberg failed to perform its legally obligated due diligence that would otherwise have raised red flags about the ultimate destination of their clients' money.
The regulatory authority's three-person arbitration panel agreed and awarded the Bleadons $750,000 Tuesday.
''This is especially significant because, to my knowledge, it's the first time a securities brokerage firm has been held liable for losses rather than a feeder fund, or Madoff himself,'' Lapidus said.
The couple did not want to talk about the case, but according to Lapidus, ''They are very pleased; they got the full amount that they lost.'' Stone & Youngberg is not pleased, however, and it hasn't turned over the money yet. The firm is planning to file a petition to vacate the judgment, said its attorney, Ben Suter, with the San Francisco office of Keesal, Young & Logan. He said the Bleadons' losses resulted from ''Madoff's fraud, which Stone & Youngberg did not have the duty to detect.'' The award, he said, ''is contrary to the law and contrary to the evidence.''
Referring to these and what he called other ''points of contention'' at the hearing, Lapidus said the arbitration panel ''clearly agreed with us.''
A lawsuit was filed in Washington State Superior Court by FutureSelect against Tremont, its parent companies, including Massachusetts Mutual Life Insurance Co. (MassMutual) and accounting firms Ernst & Young and KPMG. FutureSelect, which has been named in a 2009 class-action lawsuit in Seattle, alleges it lost more than $195 million, the result, it says, of the defendants' failures of due diligence and ''ongoing oversight'' in ''what would turn out to be the largest fraud in United States history.'''



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